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UNIVERSITY OF CALIFORNIA 
AT LOS ANGELES 




Digitized by tine Internet Arciiive 

in 2007 witii funding from 

IVIicrosoft Corporation 



Iittp://www.arcliive.org/details/completeworksofli04georiala 



A 



THE COMPLETE WORKS 
OF HENRY GEORGE 

PROTECTION OR 
FREE TRADE 

AN EXAMINATION OF THE TARIFF 
QUESTION, WITH ESPECIAL REGARD 
TO THE INTERESTS OF LABOR 




NEW YORK: DOUBLEDAY 
PAGE & COMPANY ^ 1904 



Copyright, 1886, by 
Henry George 



AU rights reserved 



..- I •.•^ V* *. .• • ' • ..• . • »• ■/■'fill 



•:';■ 






TO THE MEMORY 

OP THOSE ILLUSTRIOUS FRENCHMEN 

OP A CENTURY AGO 

QUESNAY, TURGOT, MIRABEAU, CONDORCET, DUPONT 

AND THEIR FELLOWS 

WHO IN THE NIGHT OP DESPOTISM FORESAW 

THE GLORIES OP THE COMING DAY 



255953 



'Prove all things : hold fast that which is good." 



PREFACE. 

IN tHs book T have endeavored to determine whether 
protection or free trade better accords with the inter- 
ests of labor, and to bring to a common conclusion on this 
subject those who really desire to raise wages. 

I have not only gone over the ground generally trav- 
ersed, and examined the arguments commonly used, 
but, carrying the inquiry further than the controversial- 
ists on either side have yet ventured to go, I have sought 
to discover why protection retains such popular strength 
in spite of all exposures of its fallacies ; to trace the con- 
nection between the tariff question and those still more 
important social questions, now rapidly becoming the 
" burning questions " of our times ; and to show to what 
radical measures the principle of free trade logically 
leads. WMle pointing out the falsity of the belief that 
tariffs can protect labor, I have not failed to recognize 
the facts which give this belief vitality, and, by an exami- 
nation of these facts, have shown, not only how little the 
working-classes can hope from that mere "revenue 
reform " which is miscalled " free trade," but how much 
they have to hope from real free trade. By thus har- 
monizing the truths which free traders perceive with the 
facts that to protectionists make their own theory plau- 
sible, I believe I have opened ground upon which those 
separated by seemingly irreconcilable differences of 
opinion may unite for that full application of the free- 



X PREFACE. 

trade principle which would secure both the largest 
production and the fairest distribution of wealth. 

By thus carrying the inquiry beyond the point where 
Adam Smith and the writers who have followed him 
have stopped, I believe I have stripped the vexed tariff 
question of its greatest difficulties, and have cleared the 
way for the settlement of a dispute which otherwise 
might go on interminably. The conclusions thus 
reached raise the doctrine of free trade from the emas- 
culated form in which it has been taught by the EngUsh 
economists to the fullness in which it was held by the 
predecessors of Adam Smith, those illustrious French- 
men, with whom originated the motto Laissez faire, and 
who, whatever may have been the confusions of their 
terminology or the faults of their method, grasped a central 
truth which free traders since their time have ignored. 

My effort, in short, has been to make such a candid 
and thorough examination of the tariff question, in all its 
phases, as would aid men to whom -the subject is now a 
perplexing maze to reach clear and firm conclusions. In 
this I trust I have done something to inspire a movement 
now faint-hearted with the earnestness and strength of 
radical conviction, to prevent the division into hostile 
camps of those whom a common purpose ought to unite, 
to give to efforts for the emancipation of labor greater 
definiteness of purpose, and to eradicate that belief in the 
opposition of national interests which leads peoples, even 
of the same blood and tongue, to regard each other as 
natural antagonists. 

To avoid any appearance of culling absurdities, I have, 
in referring to the protectionist position, quoted mainly 
from the latest writer who seems to be regarded by 
American protectionists as an authoritative exponent of 
their views— Professor Thompson of the University of 
Pennsylvania. 



CONTENTS. 



CHAPTER rAOI 

I. Introductory 1 

n. Clearing Ground • . . . 11 

in. Op Method 23 

IV. Protection as a Universal Need 28 

V. The Protective Unit 37 

VI. Trade 45 

VII. Production and Producers 60 

Vm. Tariffs for Revenue 69 

IX. Tariffs for Protection 80 

X. The Encouragement of Industry 94 

XT. The Home Market and Home Trade 103 

XII. Exports and Imports 112 

Xm, Confusions arising from the Use of Money . . 123 

Xrv. Do, High Wages Necessitate Protection f ... 135 

XV. Of Advantages and Disadvantages as Reasons 

for Protection 144 

XVT. The Development of Manufactures 153 

XVn, Protection and Producers 166 

XVin. Effects of Protection on American Industry , 181 

XIX. Protection and Wages 195 

XX. The Abolition of Protection 217 

XXI. Inadequacy of the Free-Tradk Argument ... 224 

xi 



xu 



CONTENTS. 



CHATTEB PAQB 

XXn. Thk Real Weakness of Free Trade 230 

XXm. The Real Strength op Protection 242 

XXIV. The Paradox 253 

XXV. The Robber that Takes all that is Left . . 267 

XXVI. True Free Trade 277 

XXVn. The Lion m the Wat 291 

XXVm. Free Trade and Socialism 299 

XXIX. Practical Politics 313 

XXX. Conclusion 327 

Index 333 



PROTECTION OR FREE TRADE? 



CHAPTER I. 

INTRODUCTORY. 

NEAR the window by which I write, a great bull is 
tethered by a ring in his nose. Grazing round and 
round he has wound his rope about the stake until now 
he stands a close prisoner, tantalized by rich grass he 
cannot reach, unable even to toss his head to rid him of 
the flies that cluster on his shoulders. Now and again 
he struggles vainly, and then, after pitiful bellowings, 
relapses into silent misery. 

This bull, a very type of massive strength, who, because 
he has not wit enough to see how he might be free, 
suffers want in sight of plenty, and is helplessly preyed 
upon by weaker creatures, seems to me no unfit emblem 
of the working masses. 

In all lands, men whose toil creates abounding wealth 
are pinched with poverty, and, while advancing civiliza- 
tion opens wider vistas and awakens new desires, are 
held down to brutish levels by animal needs. Bitterly 
conscious of injustice, feeling in their inmost souls that 
they were made for more than so narrow a life, they, too, 
spasmodically struggle and cry out. But until they trace 

1 



2 PEOTECTION OR FREE TRADE! 

effect to cause, mitil they see how they are fettered and 
how they may be freed, their struggles and outcries are 
as vain as those of the bull. Nay, they are vainer. I 
shall go out and drive the bull in the way that will 
untwist his rope. But who shall drive men into free- 
dom? Till they use the reason with which they have 
been gifted, nothing can avail. For them there is no 
special providence. 

Under all forms of government the ultimate power lies 
with the masses. It is not kings nor aristocracies, nor 
landowners nor capitalists, that anywhere really enslave 
the people. It is their own ignorance. Most clear is 
this where governments rest on universal suffrage. The 
working-men of the United States may mold to their wiU 
legislatures, courts and constitutions. Politicians strive 
for their favor and political parties bid against one 
another for their vote. But what avails this ? The little 
finger of aggregated capital must be thicker than the 
loins of the working masses so long as they do not know 
how to use their power. And how far from any agree- 
ment as to practical reform are even those who most feel 
the injustice of existing conditions may be seen in the 
labor organizations. Though beginning to realize the 
wastefulness of strikes and to feel the necessity of acting 
on general conditions through legislation, these organiza- 
tions when they come to formulate political demands 
seem unable to unite upon any measures capable of large 
results. 

This political impotency must continue until the 
masses, or at least that sprinkling of more thoughtful 
men who are the file-leaders of popular opinion, shall 
give such heed to larger questions as will enable them to 
agree on the path reform should take. 

It is with the hope of promoting such agreement that 
I propose in these pages to examine a vexed question 



INTRODTTCTORT. 3 

whicli must be settled before there can be any efficient 
union in political action for social reform— the question 
whether protective tariffs are or are not helpful to those 
who get their living by their labor. 

This is a question important in itself, yet far more 
important in what it involves. Not only is it true that 
its examination cannot fail to throw light upon other 
social-economic questions, but it leads directly to that 
great "Labor Question" which every day as it passes 
brings more and more to the foreground in every country 
of the civilized world. For it is a question of direction— 
a question which of two divergent roads shall be taken. 
Whether labor is to be benefited by governmental restric- 
tions or by the abolition of such restrictions is, in short, 
the question of how the bull shall go to untwist his rope. 

In one way or another, we must act upon the tariff 
question. Throughout the civilized world it everywhere 
lies within the range of practical poKtics. Even when 
protection is most thoroughly accepted there not only 
exists a more or less active minority who seek its over- 
throw, but the constant modifications that are being 
made or proposed in existing tariffs are as constantly 
bringing the subject into the sphere of political action, 
while even in that country in which free trade has 
seemed to be most strongly rooted, the policy of protec- 
tion is again raising its head. Here it is evident that 
the tariff question is the great political question of the 
immediate future. For more than a generation the 
slavery agitation, the war to which it led and the prob- 
lems growing out of that war have absorbed political 
attention in the United States. That era has passed, and 
a new one is beginning, in which economic questions 
must force themselves to the front. First among these 
questions, upon which party lines must soon be drawn 
and political discussion must rage, is the tariff question. 



4 PBOTECnON OR FREE TRADET 

It behooves not merely those who aspire to political 
leadership, but those who would conscientiously use their 
influence and their votes, to come to intelligent conclu- 
sions upon this question, and especially is this incumbent 
upon the men whose aim is the emancipation of labor. 
Some of these men are now supporters of protection; 
others are opposed to it. This division, which must 
place in political opposition to each other those who are 
at one in ultimate purpose, ought not to exist. One 
thing or the other must be true— either protection does 
give better opportunities to labor and raises wages, or it 
does not. If it does, we wrho feel that labor has not its 
rightful opportunities and does not get its fair wages 
should know it, that we may unite, not merely in sus- 
taining present protection, but in demanding far more. 
If it does not, then, even if not positively hannful to the 
working-classes, protection is a delusion and a snare, 
which distracts attention and divides strength, and the 
quicker it is seen that tariffs cannot raise wages the 
quicker are those who wish to raise wages likely to find 
out what can^ The next thing to knowing how anything 
can be done, is to know how it cannot be done. If the 
bull I speak of had wit enough to see the uselessness of 
going one way, he would surely try the other. 

My aim in this inquiry is to ascertain beyond perad- 
venture whether protection or free trade best accords 
with the interests of those who live by their labor. I 
differ with those who say that with the rate of wages 
the state has no concern. I hold with those who deem 
the increase of wages a legitimate purpose of pubUc 
policy. To raise and maintain wages is the great object 
that all who live by wages ought to seek, and working- 
men are right in supporting any measure that will attain 
that object. Nor in this are they acting selfishly, for, 
while the question of wages is the most important of 



INTRODUCTORY. 5 

questions to laborers, it is also the most important of 
questions to society at large. Whatever improves the 
condition of the lowest and broadest social stratum must 
promote the true interests of all. Where the wages of 
common labor are high and remunerative employment is 
easy to obtain, prosperity will be general. Where wages 
are highest, there will be the largest production and the 
most equitable distribution of wealth. There will inven- 
tion be most active and the brain best guide the hand. 
There will be the greatest comfort, the widest diffusion 
of knowledge, the purest morals and the truest patriot- 
ism. If we would have a healthy, a happy, an enlight- 
ened and a virtuous people, if we would have a pure 
government, firmly based on the popular will and quickly 
responsive to it, we must strive to raise wages and keep 
them high. I accept as good and praiseworthy the ends 
avowed by the advocates of protective tariffs. What I 
propose to inquire is whether protective tariffs are in 
reality conducive to these ends. To do this thoroughly I 
wish to go over all the ground upon which protective 
tariffs are advocated or defended, to consider what effect 
the opposite policy of free trade would have, and to stop 
not until conclusions are reached of which we may feel 
absolutely sure. 

To some it may seem too much to think that this can 
be done. For a century no question of public policy has 
been so widely and persistently debated as that of Pro- 
tection vs. Free Trade. Yet it seems to-day as far as 
ever from settlement— so far, indeed, that many have 
come to deem it a question as to which no certain con- 
clusions can be reached, and many more to regard it as 
too complex and abstruse to be understood by those who 
have not equipped themselves by long study. 

This is, indeed, a hopeless view. We may safely leave 
many branches of knowledge to such as can devote them- 



6 PEOTECTION OR FREE TRADEt 

selves to special pursuits. We may safely accept what 
chemists tell us of chemistry, or astronomers of astron- 
omy, or philologists of the development of language, or 
anatomists of our internal structure, for not only are 
there in such investigations no pecuniary temptations to 
warp the judgment, but the ordinary duties of men and 
of citizens do not call for such special knowledge, and 
the great body of a people may entertain the crudest 
notions as to such things and yet lead happy and useful 
lives. Far different, however, is it with matters which 
relate to the production and distribution of wealth, and 
which thus directly affect the comfort and livelihood of men. 
The intelligence which can alone safely guide in these mat- 
ters must be the intelligence of the masses, for as to such 
things it is the common opinion, and not the opinion of 
the learned few, that finds expression in legislation. 

If the knowledge required for the proper ordering of 
public affairs be like the knowledge required for the 
prediction of an eclipse, the making of a chemical analy- 
sis, or the decipherment of a cuneiform inscription, or 
even like the knowledge required in any branch of art or 
handicraft, then the shortness of human life and the 
necessities of human existence must forever condemn the 
masses of men to ignorance of matters which directly 
affect their means of subsistence. If this be so, then 
popular government is hopeless, and, confronted on one 
side by the fact, to which all experience testifies, that a 
people can never safely trust to any portion of their 
number the making of regulations which affect their 
earnings, and on the other by the fact that the masses 
can never see for themselves the effect of such regulations, 
the only prospect before mankind is that the many must 
always be ruled and robbed by the few. 

But this is not so. Political economy is only the econ- 
omy of human aggregates, and its laws are laws which 



INTRODUCTORY. 7 

we may individually recognize. What is required for 
their elucidation is not long arrays of statistics nor the 
collocation of laboriously ascertained facts, but that sort 
of clear thinking which, keeping in mind the distiuction 
between the part and the whole, seeks the relations of 
familiar things, and which is as possible for the unlearned 
as for the learned. 

Whether protection does or does not increase national 
wealth, whether it does or does not benefit the laborer, 
are questions that from their nature must admit of deci- 
sive answers. That the controversy between protection 
and free trade, widely and energetically as it has been 
carried on, has as yet led to no accepted conclusion can- 
not therefore be due to difficulties inherent in the subject. 
It may in part be accounted for by the fact that powerful 
pecuniary interests are concerned in the issue, for it is 
true, as Macaulay said, that if large pecuniary interests 
were concerned in denying the attraction of gravitation, 
that most obvious of physical facts would have disputers. 
But that so many fair-minded men who have no special 
interests to serve are still at variance on this subject can, 
it seems to me, be fully explained only on the assump- 
tion that the discussion has not been carried far enough 
to bring out that full truth which harmonizes all partial 
truths. 

The present condition of the controversy, indeed, 
shows this to be the fact. In the literature of the sub- 
ject, I know of no work in which the inquiry has yet 
been carried to its proper end. As to the effect of pro- 
tection upon the production of wealth, all has probably 
been said that can be said ; but that part of the question 
which relates to wages and which is primarily concerned 
with the distribution of wealth has not been adequately 
treated. Yet this is the very heart of the controversy, 
the ground from which, untU it is thoroughly explored, 



8 PROTECTION OR FREE TRADE t 

fallacies and confusions must constantly arise, to envelop 
in obscurity even that which has of itself been sufficiently 
explained. 

The reason of this failure is not far to seek. Political 
economy is the simplest of the sciences. It is but the 
intellectual recognition, as related to social life, of laws 
which in their moral aspect men instinctively recognize, 
and which are embodied in the simple teachings of Him 
whom the common people heard gladly. But, like Chris- 
tianity, political economy has been warped by institutions 
which, denying the equality and brotherhood of man, 
have enlisted authority, silenced objection, and ingrained 
themselves in custom and habit of thought. Its profes- 
sors and teachers have almost invariably belonged to or 
been dominated by that class which tolerates no ques- 
tioning of social adjustments that give to those who do 
not labor the fruits of labor's toil. They have been like 
physicians employed to make a diagnosis on condition 
that they shall discover no unpleasant truth. Given 
social conditions such as those that throughout the civi- 
lized world to-day shock the moral sense, and political 
economy, fearlessly pursued, must lead to conclusions 
that will be as a lion in the way to those who have any 
tenderness for "vested interests." But in the colleges 
and universities of our time, as in the Sanhedrim of old, 
it is idle to expect any enunciation of truths unwelcome 
to the powers that be, 

Adam Smith demonstrated clearly enough that protec- 
tive tariffs hamper the production of wealth. But Adam 
Smith— the university professor, the tutor and pensioner 
of the Duke of Buccleuch, the prospective holder of a 
government place— either did not deem it prudent to go 
further, or, as is more probable, was prevented from 
seeing the necessity of doing so by the atmosphere of his 
time and place. He at any rate failed to carry his great 
inquiry into the causes which from " that original state 



INTRODUCTORY. 9 

of things in wMch the production of labor constitutes 
the natural recompense or wages of labor " had developed 
a state of things in which natural wages seemed to be 
only such part of the produce of labor as would enable 
the laborer to exist. And, following Smith, came Mal- 
thus, to formulate a doctrine which throws upon the 
Creator the responsibility for the want and vice that flow 
from man's injustice— a doctrine which has barred from 
the inquiry which Smith did not pursue even such high 
and generous minds as that of John Stuart Mill. Some 
of the publications of the Anti-Corn-Law League contain 
indications that if the struggle over the English corn- 
laws had been longer continued, the discussion might 
have been pushed further than the question of revenue 
tariff or protective tariff ; but, ending as it did, the capi- 
talists of the Manchester school were satisfied, and in 
such discussion as has since ensued English free traders, 
with few exceptions, have made no further advance, 
while American advocates of free trade have merely 
followed the English free traders. 

On the other hand, the advocates of protection have 
evinced a like indisposition to venture on burning 
ground.' They extol the virtues of protection as furnish- 
ing employment, without asking how it comes that any 
one should need to be furnished with emplo3rment ; they 
assert that protection maintains the rate of wages, with- 
out explaining what determines the rate of wages. The 
ablest of them, under the lead of Carey, have rejected the 
Malthusian doctrine, but only to set up an equally unten- 
able optimistic theory which serves the same purpose of 
barring inquiry into the wrongs of labor, and which has 
been borrowed by Continental free traders as a weapon 
with which to fight the agitation for social reform. 

That, so far as it has yet gone, the controversy 
between protection and free trade has not been carried 
to its logical conclusions is evident from the positions 



10 PEOTECTION OR FREE TRADE f 

which both sides occupy. Protectionists and free traders 
alike seem to lack the courage of their convictions. If 
protection have the virtues claimed for it, why should it 
be confined to the restriction of imports from foreign 
countries? If it really "provides employment" and 
raises wages, then a condition of things in which hun- 
dreds of thousands vainly seek employment, and wages 
touch the point of bare subsistence, demands a far more 
vigorous application of this beneficent principle than any 
protectionist has yet proposed. On the other hand, if 
the principle of free trade be true, the substitution of a 
revenue tariff for a protective tariff is a ridiculously 
inefficient application of it. 

Like the two knights of allegory, who, halting one on 
each side of the shield, continued to dispute about it 
when the advance of either must have revealed a truth 
that would have ended their controversy, protectionists 
and free traders stand to-day. Let it be ours to carry 
the inquiry wherever it may lead. The fact is, that fully 
to understand the tariff question we must go beyond the 
tariff question as ordinarily debated. And here, it may 
be, we shall find ground on which honest divergences of 
opinion may be reconciled, and facts which seem conflict- 
ing may fall into harmonious relations. 



CHAPTER n. 

CLEAEING GROUND. 

THE protective theory has certainly the weight of 
most general acceptance. Forty years ago all civi- 
lized countries based their policy upon it; and though 
Great Britain has since discarded it, she remains the only 
considerable nation that has done so, while not only 
have her own colonies, as soon as they have obtained the 
power, shown a disposition to revert to it, but such a dis- 
position has of late years been growing in Great Britain 
herself. 

It should be remembered, however, that the presump- 
tion in favor of any belief generally entertained has 
existed in favor of many beliefs now known to be 
entirely erroneous, and is especially weak in the case of 
a theory which, like that of protection, enlists the support 
of powerful special interests. The history of mankind 
everywhere shows the power that special interests, capa- 
ble of organization and action, may exert in securing 
the acceptance of the most monstrous doctrines. We 
have, indeed, only to look around us to see how easily a 
smaU special interest may exert greater influence in 
forming opinion and making laws than a large general 
interest. As what is everybody's business is nobody's 
business, so what is everybody's interest is nobody's 
interest. Two or three citizens of a seaside town see 

11 



t 

12 PROTECTION OR FREE TRADE? 

that the building of a custom-house or the dredging of a 
creek will put money in their pockets; a few silver- 
miners conclude that it will be a good thing for them to 
have the government stow away some millions of silver 
every month; a navy contractor wants the profit of 
repairing useless ironclads or building needless cruisers, 
and again and again such petty interests have their way 
against the larger interests of the whole people. What 
can be clearer than that a note directly issued by the 
government is at least as good as a note based on a 
government bond? Yet special interests have sufficed 
with us to institute and maintain a hybrid currency for 
which no other valid reason can be assigned than private 
profit. 

Those who are specially interested in protective tariffs 
find it easy to believe that protection is of general benefit. 
The directness of their interest makes them active in 
spreading their views, and having control of large means 
—for the protected industries are those in which large 
capitals are engaged— and being ready on occasion, as a 
matter of business, to spend money in propagating their 
doctrines, they exert great influence upon the organs of 
public opinion. Free trade, on the contrary, offers no 
special advantage to any particular interest, and in the 
present state of social morality benefits or injuries which 
men share in common with their fellows are not felt so 
intensely as those which affect them specially. 

I do not mean to say that the pecuniary interests 
which protection enlists suffice to explain the wide-spread 
acceptance of its theories and the tenacity with which 
they are held. But it is plain that these interests do 
constitute a power of the kind most potent in forming 
opinion and influencing legislation, and that this fact 
weakens the presumption the wide acceptance of protec- 
tion might otherwise afford, and is a reason why those 



CLEARING GROUND. 13 

who believe in protection merely because they have con- 
stantly heard it praised should examine the question for 
themselves. 

Protection, moreover, has always found an effective ally 
in those national prejudices and hatreds which are in 
part the cause and in part the result of the wars that 
have made the annals of mankind a record of bloodshed 
and devastation— prejudices and hatreds which have 
everywhere been the means by which the masses have 
been induced to use their own power for their own 
enslavement. 

For the first half-century of our national existence 
American protectionists pointed to the protective tariff 
of Great Britain as an example to be followed ; but since 
that country, in 1846, discarded protection, its American 
advocates have endeavored to utilize national prejudice 
by constantly speaking of protection as an American 
system and of free trade as a British invention. Just 
now they are endeavoring to utilize in the same way the 
enmity against everything British which long oppres- 
sions and insults have engendered in the Irish heart, 
and, in the words of a recent political platform, Irish- 
Americans are called upon "to resist the introduction 
into America of the English theory of free trade, which 
has been so successfully used as a means to destroy the 
industries and oppress the people of Ireland." 

Even if free trade had originated in Great Britain we 
should be as foolish in rejecting it on that account as 
we should be in refusing to speak our mother tongue 
because it is of British origin, or in going back to hand- 
and water-power because steam-engines were first intro- 
duced in Great Britain. But, in truth, free trade no 
more originated in Great Britain than did the habit of 
walking on the feet. Free trade is the natural trade— 
the trade that goes on in the absence of artificial restric- 



14 PROTECTION OE FREE TRADE? 

tions. It is protection that had to be invented. Bnt 
instead of being invented in the United States, it was in 
full force in Great Britain long before the United States 
were thought of. It would be nearer the truth to say 
that protection originated in Great Britain, for, if the 
system did not originate there, it was fully developed 
there, and it is from that country that it has been 
derived by us. Nor yet did the reaction against it origi- 
nate in Great Britain, but in France, among a school of 
eminent men headed by Quesnay, who were Adam 
Smith's predecessors and in many things his teachers. 
These French economists were what neither Smith nor 
any subsequent British economist or statesman has been 
—true free traders. They wished to sweep away not 
merely protective duties, but all taxes, direct and indi- 
rect, save a single tax upon land values. This logical 
conclusion of free-trade principles the so-caUed British 
free traders have shirked, and it meets to-day as bitter 
opposition from the Cobden Club as from American pro- 
tectionists. The only sense in which we can properly 
speak of " British free trade " is the same sense in which 
we speak of a certain imitation metal as " German silver." 
" British free trade " is spurious free trade. Great Brit- 
ain does not really enjoy free trade. To say nothing of 
internal taxes, inconsistent with true free trade, she still 
maintains a cordon of custom-house officers, coast-guards 
and baggage-searchers, and stiU collects over a hundred 
million dollars of her revenue from import duties. To 
be sure, her tariff is "for revenue only," but a tariff for 
revenue only is not free trade. The ruling classes of 
Great Britain have adopted only so much free trade as 
suits their class interests, and the battle for free trade in 
that country has yet to be fought. 

On the other hand, it is absurd to talk of protection as 
an American system. It had been fully developed in 



I 



CLEAEING GROUND. 19 

Europe before the American colonies were planted, and 
during our colonial period England maintained a more 
thorough system of protection than now anywhere exists 
—a system which aimed at building up English indus- 
tries not merely by protective duties, but by the repres- 
sion of like industries in Ireland and the colonies, and 
wherever else throughout the world English power could 
be exerted. What we got of protection was the wrong 
side of it, in regulations intended to prevent American 
industries from competing with those of the mother 
country and to give to her a monopoly of the American 
trade. 

The irritation produced in the growing colonies by 
these restrictions was the main cause of the Revolution 
which made of them an independent nation. Protec- 
tionist ideas were doubtless at that time latent among 
our people, for they permeated the mental atmosphere of 
the civilized world, but so little disposition was there to 
embody those ideas in a national policy, that the Ameri- 
can representatives in negotiating the treaty of peace 
endeavored to secure complete freedom of trade between 
the United States and Great Britain. This was refused 
by England, then and for a long time afterwards com- 
pletely dominated by protective ideas. But during the 
period following the Revolution iu which the American 
Union existed under the Articles of Confederation, no 
tariff hampered importations into the American States. 

The adoption of the Constitution made a Federal tariff 
possible, and to give the Federal Government an inde- 
pendent revenue a tariff was soon imposed ; but although 
protection had then begun to find advocates in the 
United States, this first American tariff was almost 
nominal as compared with what the British tariff was 
then or our tariff is now. And in the Federal Constitu- 
tion State tariffs were prohibited— a step which has re- 



16 PROTECTION OR FREE TRADEf 

suited in giving to the principle of free trade the greatest 
extension it has had in modern times. Nothing could 
more clearly show how far the American people then 
were from accepting the theories of protection since 
popularized among them, for the national idea had not 
then acquired the force it has since gained, and if protec- 
tion had then been looked upon as necessary the different 
States would not without a struggle have given up the 
power of imposing tariffs of their own. 

Nor could protection have reached its present height in 
the United States but for the civil war. While attention 
was concentrated on the struggle and mothers were 
sending their sons to the battle-field, the interests that 
sought protection took advantage of the patriotism that 
was ready for any sacrifice to secure protective taxes 
such as had never before been dreamed of— taxes which 
they have ever since managed to keep in force, and even 
in many cases to increase. 

The truth is that protection is no more American than 
is the distinction made in our regular army and navy 
between commissioned officers and enlisted men— a dis- 
tinction not of degree but of kind, so that there is 
between the highest non-commissioned officer and the 
lowest commissioned officer a deep gulf fixed, a guK 
which can only be likened to that which exists between 
white and black where the color-line is drawn sharpest. 
This distinction is historically a survival of that made in 
the armies of aristocratic Europe, when they were offi- 
cered by nobles and recruited from peasants, and has 
been copied by us in the same spirit of imitation that has 
led us to copy other undemocratic customs and institu- 
tions. Though we preserve this aristocratic distinction 
after it has been abandoned in some European countries, 
it is in no sense American. It neither originated with 
OS nor does it consort with our distinctive ideas and 



CLEARING GROUND. 17 

institutions. So it is with protection. Whatever be its 
economic merits there can be no doubt that it conflicts with 
those ideas of natural right and personal freedom which 
received national expression in the establishment of the 
American Republic, and which we have been accustomed 
to regard as distinctively American. What more incon- 
gruous than the administering of custom-house oaths and 
the searching of trunks and hand-bags under the shadow 
of "Liberty Enlightening the World"? 

As for the assertion that " the English theory of free 
trade" has been used "to destroy the industries and 
oppress the people of Ireland," the truth is that it was 
"the English theory of protection" that was so used. 
The restrictions which British protection imposed* upon 
the American colonies were trivial as compared with 
those imposed upon Ireland. The successful resistance 
of the colonies roused in Ireland the same spirit, and led 
to the great movement of " Irish Volunteers," who, with 

cannon bearing the inscription " Free Trade or ! " 

forced the repeal of those restrictions and won for a 
time Irish legislative independence. 

Whether Irish industries that were unquestionably 
hampered and throttled by British protection could now 
be benefited by Irish protection, like the question 
whether protection benefits the United States, is only to 
be settled by a determination of the effects of protection 
upon the country that imposes it. But without going 
into that, it is evident that the free trade between Great 
Britain and Ireland which has existed since the union in 
1801, has not been the cause of the backwardness of 
Irish industry. There is one part of Ireland which has 
enjoyed comparative prosperity and in which important 
industries have grown up— some of them, such as the 
building of iron ships, for which natural advantages 
cannot be claimed. How can this be explained on the 



18 PROTECTION OB FREE TRADE? 

theory that Irish industries cannot be reestablished with- 
out protection ? 

If the very men who are now trying to persuade Irish- 
American voters that Ireland has been impoverished by 
"British free trade" were privately asked the cause of 
the greater prosperity of Ulster over other parts of Ire- 
land, they would probably give the answer made familiar 
by religious bigotry— that Ulster is enterprising and 
prosperous because it is Protestant, while the rest of 
Ireland is sluggish and poor because it is Catholic, But 
the true reason is plain. It is, that the land tenure in 
Ulster has been such that a larger portion of the wealth 
produced has been left there than in other parts of Ire- 
land, and that the mass of the people have not been so 
remorselessly hunted and oppressed. In Presbyterian 
Skye the same general poverty, the same primitive condi- 
tions of industry exist as in Catholic Connemara, and its 
cause is to be seen in the same rapacious system of land- 
lordism which has carried off the fruits of industry and 
prevented the accumulation of capital. To attribute the 
backwardness of industry among a people who are 
steadily stripped of aU they can produce above a bare 
living to the want of a protective tariff or to religious 
opinions is like attributing the sinking of a scuttled ship 
to the loss of her figurehead or the color of her paint. 

What, however, in the United States at least, has 
tended more than any appeals to national feeling to 
dispose the masses in favor of protection, has been the 
difference of attitude toward the working-classes assumed 
by the contending policies. In its beginnings in this 
country protection was strongest in those sections where 
labor had the largest opportunities and was held in the 
highest esteem, while the strength of free trade has been 
the greatest in the section in which up to the civil war 
slavery prevailed. The political party which success- 



CLEARma GROUND. 19 

fully challenged the aggressions of the slave power also 
declared for a protective tariff, while the men who tried 
to rend the Union in order to establish a nation based 
upon the right of capital to own labor, prohibited protec- 
tion in the constitution they formed. The explanation 
of these facts is, that in one section of the country there 
were many industries that coidd be protected, while in 
the other section there were few. While American 
cotton culture was in its earlier stages. Southern cotton- 
planters were willing enough to avail themselves of a 
heavy duty on India cottons, and Louisiana sugar- 
growers have always been persistent sticklers for protec- 
tion. But when cotton raised for export became the 
great staple of the South, protection, in the absence of 
manufactures, was not only clearly opposed to dominant 
Southern interests, but assumed the character of a sec- 
tional imposition by which the South was taxed for the 
benefit of the North. This sectional division on the tariff 
question had no reference whatever to the conditions of 
labor, but in many minds its effect has been to associate 
protection with respect for labor and free trade with its 
enslavement. 

Irrespective of this there has been much in the presen- 
tation of the two theories to dispose the working-classes 
toward protection and against free trade. Working-men 
^generally feel that they do not get a fair reward for their 

ibor. They know that what prevents them from suc- 
'cessfully demanding higher wages is the competition of 
others anxious for work, and they are naturally disposed 
[to favor the doctrine or party that proposes to shield 
[them from competition. This, its advocates urge, is the 
of protection. And whatever protection accom- 
[pUshes, protectionists at least profess regard for the 
[working-classes, and proclaim their desire to use the 

)owers of government to raise and maintain wages. 



20 PROTECTION OR FREE TRADE! 

Protection, they declare, means the protection of labor. 
So constantly is this reiterated that many suppose that 
this is the real derivation of the term, and that " protec- 
tion " is short for " protection of labor." 

On the other hand, the opponents of protection have, 
for the most part, not only professed no special interest 
in the weU-being of the working-classes and no desire to 
raise wages, but have denied the justice of attempting to 
use the powers of government for this purpose. The 
doctrines of free trade have been intertwined with teach- 
ings that throw upon the laws of nature responsibility 
for the poverty of the laboring-class, and foster a callous 
indifference to their sufferings. On the same grounds 
on which they have condemned legislative interference 
with commerce, free-trade economists have condemned 
interference with hours of labor, with the rate of wages, 
and even with the employment of women and children, 
and have united protectionism and trades-unionism in 
the same denunciation, proclaiming supply and demand 
to be the only true and rightful regulator of the price of 
labor as of the price of pig-iron. While protesting 
against restrictions upon the production of wealth they 
have ignored the monstrous injustice of its distribution, 
and have treated as fair and normal that competition in 
which human beings, deprived of their natural oppor- 
tunities of emploj'ing themselves, are compelled by 
biting want to bid against one another. 

All this is true. But it is also true that the needs of 
labor require more than kind words, and are not to be 
satisfied by such soft phrases as we address to a horse 
when we want to catch him that we may put a bit in his 
mouth and a saddle on his back. Let me ask those who 
are disposed to regard protection as favorable to the 
aspirations of labor, to consider whether it can be true 
that what labor needs is to be protected? 



CLEAEING GROUND. 21 

To admit that labor needs protection is to acknowledge 
its inferiority; it is to acquiesce in an assumption that 
degrades the workman to the position of a dependent, 
and leads logically to the claim that the employee is 
bound to vote in the interest of the employer who 
provides him with work. There is something in the very 
word '' protection" that ought to make working-men 
cautious of accepting anything presented to them under 
it. The protection of the masses has in all times been 
the pretense of tyranny— the plea of monarchy, of aris- 
tocracy, of special privilege of every kind. The slave- 
owners justified slavery as protecting the slaves. British 
misrule in Ireland is upheld on the ground that it is for 
the protection of the Irish. But, whether under a mon- 
archy or under a republic, is there an instance in the 
history of the world in which the " protection " of the 
laboring masses has not meant their oppression? The 
protection that those who have got the law-making 
power into their hands have given to labor, has at best 
always been the protection that man gives to cattle — he 
protects them that he may use and eat them. 

There runs through protectionist professions of con- 
cern for labor a tone of condescending patronage more 
insulting to men who feel the true dignity of labor than 
frankly expressed contempt could be— an assumption 
that pauperism is the natural condition of labor, to 
which it must everywhere fall unless benevolently pro- 
tected. It is never intimated that the landowner or the 
capitalist needs protection. They, it is always assumed, 
can take care of themselves. It is only the poor work- 
ing-man who must be protected. 

What is labor that it should so need protection? Is 
not labor the creator of capital, the producer of all 
wealth? Is it not the men who labor that feed and 
clothe all others ? Is it not true, as has been said, that 



&SI PROTECTION OR FREE TRADE f 

the three great orders of society are "working-men, 
beggar-men and thieves " 1 How, then, does it come that 
working-men alone need protection! When the first 
man came upon the earth who was there to protect him 
or to provide him with employment! Yet whenever or 
however he came, he must have managed to get a living 
and raise a family ! 

When we consider that labor is the producer of all 
wealth, is it not evident that the impoverishment and 
dependence of labor are abnormal conditions resulting 
from restrictions and usurpations, and that instead of 
accepting protection, what labor should demand is free- 
dom? That those who advocate any extension of free- 
dom choose to go no further than suits their own special 
purpose is no reason why freedom itself should be dis- 
trusted. For years it was held that the assertion of our 
Declaration of Independence that all men are created 
equal and endowed by their Creator with unalienable 
rights, applied only to white men. But this in no wise 
vitiated the principle. Nor does it vitiate the principle 
that it is still held to apply only to political rights. 

And so, that freedom of trade has been advocated by 
those who have no sympathy with labor should not pre- 
judice us against it. Can the road to the industrial 
emancipation of the masses be any other than that of 
freedom? 



CHAPTER m. 

OF METHOD. 

ON the deck of a ship men are pulling on a rope, and 
on her mast a yard is rising. A man aloft is clinging 
to the tackle that raises the yard. Is his weight assisting 
its rise or retarding it? That, of course, depends on 
what part of the tackle his weight is thrown upon, and 
can be told only by noticing whether its tendency is with 
or against the efforts of those who pull on deck. 

If in things so simple we may- easily err in assuming 
cause from effect, how much more liable to error are 
such assumptions in regard to the complicated phenom- 
ena of social life. 

Much that is urged in current discussions of the tariff 
question is of no validity whatever, and however it may 
serve the purpose of controversy, cannot aid in the dis- 
covery of truth. That a thing exists with or follows 
another thing is no proof that it is because of that other 
^thing. This assumption is the fallacy post hoc, ergo 
jropter hoc, which leads, if admitted, to the most prepos- 
terous conclusions. "Wages in the United States are 
ligher than in England, and we differ from England in 
laving a protective tariff. But the assumption that the 
Jone fact is because of the other, is no more valid than 
rould be the assumption that these higher wages are due 
[to our decimal coinage or to our republican form of 

23 



24 PROTECTION OR FREE TRADE! 

government. That England has grown in wealth since 
the abolition of protection proves no more for free trade 
than the growth of the United States under a protective 
tariff does for protection. It does not foUow that an 
institution is good because a country has prospered 
under it, nor bad because a country in which it exists is 
not prosperous. It does not even follow that institu- 
tions to be found in all prosperous countries and not to 
be found in backward countries are therefore beneficial. 
For this, at various times, might have been confidently 
asserted of slavery, of polygamy, of aristocracy, of estab- 
lished churches, and it may still be asserted of public 
debts, of private property in land, of pauperism, or of 
the existence of distinctively vicious or criminal classes. 
Nor even when it can be shown that certain changes in 
the prosperity of a country, of an industry, or of a class, 
have followed certain other changes in laws or institu- 
tions can it be inferred that the two are related to each 
other as effect and cause, unless it can also be shown 
that the assigned cause tends to produce the assigned 
effect, or unless, what is clearly impossible in most cases, 
it can be shown that there is no other cause to which the 
effect can be attributed. The almost endless multiplicity 
of causes constantly operating in human societies, and 
the almost endless interference of effect with effect, make 
that popular mode of reasoning which logicians call the 
method of simple enumeration worse than useless in 
social investigations. 

As for reliance upon statistics, that involves the addi- 
tional difficulty of knowing whether we have the right 
statistics. Though " figures cannot lie," there is in their 
collection and grouping such liability to oversight and 
such temptation to bias that they are to be distrusted in 
matters of controversy until they have been subjected to 



OP METHOD. 25 

rigid examination. The value of most arguments turn- 
ing upon statistics is well illustrated in the story of the 
government clerk who, being told to get up the statistics 
of a certain question, wished first to know which side it 
was desired that they should support. Under their 
imposing appearance of exactness may lurk the gravest 
errors and wildest assumptions. 

To ascertain the effect of protective tariffs, we must 
inquire what they are and how they operate. When we 
thus discover their nature and tendencies, we shall be 
able to weigh what is said for or against them, and have 
a clue by which we may trace their results amid the com- 
plications of social phenomena. For the largest com- 
munities are but expansions of the smallest communities, 
and the rules of arithmetic by which we calculate gain or 
loss on transactions of dollars apply as weU to transac- 
tions of hundreds of millions. 

Thus the facts we must use and the principles we must 
apply are common facts that are known to aU and prin- 
ciples that are recognized in every-day life. Starting 
from premises as to which there can be no dispute, we 
have only to be careful as to our steps in order to reach 
conclusions of which we may feel sure. We cannot 
experiment with communities as the chemist can with 
material substances, or as the physiologist can with 
animals. Nor can we find nations so alike in aU other 
respects that we can safely attribute any difference in 
their conditions to the presence or absence of a single 
cause without first assuring ourselves of the tendency of 
that cause. But the imagination puts at our command 
a method of investigating economic problems which is 
within certain limits hardly less useful than actual 
experiment. We may test the working of known prin- 
ciples by mentally separating, combining or eliminating 



26 PEOTECTION OR FREE TRADE? 

conditions. Let me explain what I mean by an illustra- 
tion I have once before used.* 

When I was a boy I went down to the wharf with 
another boy to see the first iron steamship that had ever 
crossed the ocean to Philadelphia. Now, hearing of an 
iron steamship seemed to us then a good deal like hearing 
of a leaden kite or a wooden cooking-stove. But we had 
not been long aboard of her, before my comrade said in 
a tone of contemptuous disgust : " Pooh ! I see how it is. 
She's all lined with wood ; that's the reason she floats." 
I could not controvert him for the moment, but I was 
not satisfied, and sitting down on the wharf when he left 
me, I set to work trying mental experiments. If it was 
the wood inside of her that made her float, then the more 
wood the higher she would float ; and, mentally, I loaded 
her up with wood. But, as I was famUiar with the pro- 
cess of making boats out of blocks of wood, I at once 
saw that, instead of floating higher, she would sink 
deeper. Then, I mentally took all the wood out of her, 
as we dug out our wooden boats, and saw that thus 
lightened she would float higher stiU. Then, in imagina- 
tion, I jammed a hole in her, and saw that the water 
would run in and she would sink, as did our wooden 
boats when ballasted with leaden keels. And thus I 
saw, as clearly as though I could have actually made 
these experiments with the steamer, that it was not 
the wooden lining that made her float, but her hoUow- 
ness, or, as I would now phrase it, her displacement of 
water. 

In such ways as this, with which we are all familiar, 
we can isolate, analyze or combine economic principles, 
and, by extending or diminishing the scale of proposi- 



* Lecture before the students of the University of California, on 
the "Study of Political Economy," April, 1877. 



OF METHOD. 



27 



tions, either subject them to inspection through a mental 
magnifying-glass or bring a larger field into view. And 
this each one can do for himself. In the inquiry upon 
which we are about to enter, all I ask of the reader is 
that he shall in nothing trust to me. 



CHAPTER IV. 

PROTECTION AS A UNIVERSAL NEED. 

TO understand a thing it is often well to begin by 
looking at it, as it were, from the outside and 
observing its relations, before examining it in detail. 
Let us do this with the protective theory. 

Protection, as the term has come to signify a certain 
national policy, means the levying of duties upon im- 
ported commodities for the purpose of protecting from 
competition the home producers of such commodities. 
Protectionists contend that to secure the highest pros- 
perity of each nation it should produce for itself every- 
thing it is capable of producing, and that to this end its 
home industries should be protected against the compe- 
tition of foreign industries. They also contend (in the 
United States at least) that to enable workmen to obtain 
as high wages as possible they should be protected by 
tariff duties against the competition of goods produced 
in countries where wages are lower. Without disputing 
the correctness of this theory, let us consider its larger 
relations. 

The protective theory, it is to be observed, asserts a 
general law, as true in one country as in another. How- 
ever protectionists in the United States may talk of 
"American protection" and "British free trade," pro- 
tection is, and of necessity must be, advocated as of 

28 



PROTECTION AS A UNIVERSAL NEED. 29 

universal application. American protectionists use the 
arguments of foreign protectionists, and even where 
they complain that the protective policy of other coun- 
tries is injurious to us, commend it as an example which 
we should follow. They contend that (at least up to a 
certain point in national development) protection is 
everywhere beneficial to a nation, and free trade every- 
where injurious ; that the prosperous nations have built 
up their prosperity by protection, and that all nations 
that would be prosperous must adopt that policy. And 
their arguments must be universal to have any plausi- 
bility, for it would be absurd to assert that a theory of 
national growth and prosperity applies to some countries 
and not to others. 

Let me ask the reader who has hitherto accepted the 
protective theory to consider what its necessarily uni- 
versal character involves. It was the realization of this 
that first led me to question that theory. I was for a 
number of years after I had come of age a protectionist, 
or rather, I supposed I was, for, without real examina- 
tion, I had accepted the belief, as in the first place we all 
accept our beliefs, on the authority of others. So far, 
however, as I thought at all on the subject, I was logical, 
and I well remember how when the Florida and Alabama 
were sinking American ships at sea, I thought their 
depredations, after all, a good thing for the State in 
which I lived— California— since the increased risk and 
cost of ocean carriage in American ships (then the only 
way of bringing goods from the Eastern States to Cali- 
fornia) would give to her infant industries something of 
that needed protection against the lower wages and 
better established industries of the Eastern States which 
the Federal Constitution prevented her from securing by 
a State tariff. The full bearing of such notions never 
occurred to me till I happened to hear the protective 



80 PROTECTION OR FREE TRADE f 

theory elaborately expounded by an able man. As he 
urged that American industries must be protected from 
the competition of foreign countries, that we ought to 
work up our own raw materials and allow nothing to be 
imported that we could produce for ourselves, I began 
to realize that these propositions, if true, must be uni- 
versally true, and that not only should every nation shut 
itself out from every other nation ; not only should the 
various sections of every large country institute tariffs 
of their own to shelter their industries from the competi- 
tion of other sections, but that the reason given why no 
people should obtain from abroad anything they might 
make at home, must apply as well to the family. It was 
this that led me to weigh arguments I had before accepted 
without real examination. 

It seems to me impossible to consider the necessarily 
universal character of the protective theory without 
feeling it to be repugnant to moral perceptions and 
inconsistent with the simplicity and harmony which we 
everywhere discover in natural law. What should we 
think of human laws framed for the government of a 
country which should compel each family to keep con- 
stantly on their guard against every otiier family, to 
expend a large part of their time and labor in preventing 
exchanges with their neighbors, and to seek their own 
prosperity by opposing the natural efforts of other fami- 
lies to become prosperous? Yet the protective theory 
implies that laws such as these have been imposed by the 
Creator upon ihe families of men who tenant this earth. 
It implies that by virtue of social laws, as immutable as 
the physical laws, each nation must stand jealously on 
guard against every other nation and erect artificial 
obstacles to national intercourse. It implies that a 
federation of mankind, such as that which prevents the 
establishment of tariffs between the States of the Ameri- 



PROTECTION AS A UNIVERSAL NEED. 31 

can Union, would be a disaster to the race, and that in 
an ideal world each nation would be protected from 
every other nation by a cordon of tax-collectors, with 
their attendant spies and informers. 

Such a theory might consort with that form of poly- 
theism which assigned to each nation a separate and 
hostile God ; but it is hard to reconcile it with the idea 
of the unity of the Creative Mind and the universality of 
law. Imagine a Christian missionary expounding t9 a 
newly discovered people the sublime truths of the gospel 
of peace and love— the fatherhood of God; the brother- 
hood of man ; the duty of regarding the interests of our 
neighbors equally with our own, and of doing to others 
as we would have them do to us. Could he, in the 
same breath, go on to declare that, by virtue of the 
laws of this same God, each nation, to prosper, must 
defend itself against all other nations by a protective 
tariff? 

Religion and experience alike teach us that the highest 
good of each is to be sought in the good of others ; that 
the true interests of men are harmonious, not antago- 
nistic ; that prosperity is the daughter of good will and 
peace ; and that want and destruction follow enmity and 
strife. The protective theory, on the other hand, implies 
the opposition of national interests ; that the gain of one 
people is the loss of others ; that each must seek its own 
good by constant efforts to get advantage over others 
and to prevent others from getting advantage over it. 
It makes of nations rivals instead of cooperators; it 
inculcates a warfare of restrictions and prohibitions and 
searchings and seizures, which differs in weapons, but 
not in spirit, from that warfare which sinks ships and 
burns cities. Can we imagine the nations beating their 
swords into plowshares and their spears into pruning- 
hooks and yet maintaining hostile tariffs? 



83 PROTECTION OR FREE TRADEt 

No matter whether he call himself Christian or Deist, 
or Agnostic or Atheist, who can look about him without 
seeing that want and suffering flow inevitably from self- 
ishness, and that in any community the golden rule 
which teaches us to regard the interests of others as 
carefully as our own would bring not only peace but 
plenty T Can it be that what is true of individuals 
ceases to be true of nations— that in one sphere the law 
of prosperity is the law of lovej in the other that of 
strife? On the contrary, universal history testifies that 
poverty, degradation and enslavement are the inevitable 
results of that spirit which leads nations to regard each 
other as rivals and enemies. 

Every political truth must be a moral truth. Yet who 
can accept the protective theory as a moral truth ? 

A few months ago I found myself one night, with four 
other passengers, in the smoking-car of a Pennsylvania 
limited express-train traveling west. The conversation, 
beginning with fast trains, turned to fast steamers, and 
then to custom-house experiences. One told how, com- 
ing from Europe with a trunk filled with presents for his 
wife, he had significantly said to the custom-house 
inspector detailed to examine his trunks that he was in a 
hurry. "How much of a hurry?" said the oflficer. 
"Ten dollars' worth of a hurry," was the reply. The 
officer took a quick look through the trunk and 
remarked, "That's not much of a hurry for all this." 
"I gave him ten more," said the story-teller, "and he 
chalked the trunk." 

Then another told how under similar circumstances he 
had placed a magnificent meerschaum pipe so that it 
would be the first thing seen on lifting the trunk-lid, 
and, when the officer admired it, had replied that it was 
his. The third said he simply put a greenback conspicu- 
ously in the first article of luggage ; and the fourth told 



PROTECTION AS A UNIVERSAL NEED. 33 

how his plan was to crumple up a note, and put it with 
his keys in the officer's hands. 

Here were four reputable business men, as I afterward 
found them to be— one an iron- worker, one a coal-pro- 
ducer, and the other two manufacturers— men of at least 
average morality and patriotism, who not only thought 
it no harm to evade the tariff, but who made no scruple 
of the false oath necessary, and regarded the bribery of 
customs officers as a good joke. I had the curiosity to 
edge the conversation from this to the subject of free 
trade, when I found that all four were stanch protec- 
tionists, and by edging it a little further I found that all 
four were thorough believers in the right of an employer 
to discharge any workman who voted for a free-trade 
candidate, holding, as they put it, that no one ought to 
eat the bread of an employer whose interests he opposed. 

I recall this conversation because it is typical. Who- 
ever has traveled on trans- Atlantic steamers has listened 
to such conversations, and is aware that the great, 
majority of the American protectionists who visit 
Europe return with purchases which they smuggle 
through, even at the expense of a "custom-house oath" 
and a greenback to the examining officer. Many of our 
largest undervaluation smugglers have been men of the 
highest social and religious standing, who gave freely of 
their spoils to churches and benevolent societies. Not 
long ago a highly respected banker, an extremely reli- 
gious man, who had probably neglected the precautions 
of my smoking-car friends, was detected in the endeavor 
to smuggle through in his luggage (which he had of 
course taken a "custom-house oath" did not contain 
anything dutiable) a lot of very valuable presents to a 
church ! 

Conscientious men will (until they get used to them) 
shrink from false oaths, from bribery, or from other 



84 PROTECTION OR FREE TRADE? 

means necessary to evade a tariff, but even of believers 
in protection are there any who really think such eva- 
sions wrong in themselves? What theoretical protec- 
tionist is there, who, if no one was watching him, would 
scruple to carry a box of cigars or a dress-pattern, or 
anything else that could be carried, across a steamer 
wharf or across Niagara bridge ? And why should he 
scruple to carry such things across a wharf, a river, or 
an imaginary line, since once inside the custom-house 
frontier no one would object to his carrying them thou- 
sands of miles 1 

That unscrupulous men, for their own private advan- 
tage, break laws intended for the general good proves 
nothing; but that no one really feels smuggling to be 
wrong proves a good deal. Whether we hold the basis 
of moral ideas to be intuitive or utilitarian, is not the 
fact that protection thus lacks the support of the moral 
sentiment inconsistent with the idea that tariffs are 
necessary to the weU-being and progress of mankind? 
If, as is held by some, moral perceptions are implanted 
in our nature as a means whereby our conduct may be 
instinctively guided in such way as to conduce to the 
general well-being, how is it, if the Creator has ordained 
that man should prosper by protective tariffs, that the 
moral sense takes no cognizance of such a law? If, as 
others hold, what we call moral perceptions be the result 
of general experience of what conduces to the common 
good, how is it that the beneficial effects of protection 
have not developed moral recognition? 

To make that a crime by statute which is no crime in 
morals, is inevitably to destroy respect for law ; to resort 
to oaths to prevent men from doing what they feel 
injures no one, is to weaken the sanctity of oaths. Cor- 
ruption, evasion and false swearing are inseparable from 
tariffs. Can that be good of which these are the fruits ? 



PROTECTION AS A UNIVERSAL NEED. 35 

A system which requires such spying and searching, 
such invoking of the Almighty to witness the contents 
of every box, bundle and package— a system which 
always has provoked, and in the nature of man always 
must provoke, corruption and fraud— can it be necessary 
to the prosperity and progress of mankind ? 

Consider, moreover, how sharply this theory of protec- 
tion conflicts with common experience and habits of 
thought. Who would think of recommending a site for 
a proposed city or a new colony because it was very diffi- 
cult to get at ? Yet, if the protective theory be true, this 
would really be an advantage. Who would regard 
piracy as promotive of civilization? Yet a discriminat- 
ing pirate, who would confine his seizures to goods which 
might be produced in the country to which they were 
being carried, would be as beneficial to that country as a 
tariff. 

Whether protectionists or free traders, we all hear 
with interest and pleasure of improvements in transpor- 
tation by water or land} we are all disposed to regard 
the opening of canals, the building of railways, the 
deepening of harbors, the improvement of steamships, as 
beneficial. But if such things are beneficial, how can 
tariffs be beneficial? The effect of such things is to 
lessen the cost of transporting commodities ; the effect of 
tariffs is to increase it. If the protective theory be true, 
every improvement that cheapens the carriage of goods 
between country and country is an injury to mankind 
unless tariffs be commensurately increased. 

The directness, the swiftness and the ease with which 
birds cleave the air, naturally excite man's desire. His 
fancy has always given angels wings, and he has ever 
dreamed of a time when the power of traversing those 
unobstructed fields might also be his. That this triumph 
is within the power of human ingenuity who in this age 



36 PROTECTION OR FREE TRADE T 

of marvels can doubt? And who would not hail with 
delight the news that invention had at last brought to 
realization the dream of ages, and made navigation of 
the atmosphere as practicable as navigation of the ocean ? 
Yet if the protective theory be true this mastery of 
another element would be a misfortune to man. For it 
would make protection impossible. Every inland town 
and village, every rood of ground on the whole earth's 
surface, would at once become a port of an all-embracing 
ocean, and the only way in which any people could con- 
tinue to enjoy the blessings of protection would be to 
roof their country in. 

It is not only improvements in transportation that are 
antagonistic to protection ; but all labor-saving invention 
and discovery. The utilization of natural gas bids fair 
to lessen the demand for native coal far more than could 
the free importation of foreign coal. Borings in Central 
New York have recently revealed vast beds of pure salt, 
the working of which will destroy the industry of salt- 
making, to encourage which we impose a duty on foreign 
salt. We maintain a tariff for the avowed purpose of 
keeping out the products of cheap foreign labor; yet 
machines are daily invented that produce goods cheaper 
than the cheapest foreign labor. Clearly the only con- 
sistent protectionism is that of China, which would not 
only prohibit foreign commerce, but forbid the intro- 
duction of labor-saving machinery. 

The aim of protection, in short, is to prevent the 
bringing into a country of things in themselves useful 
and valuable, in order to compel the making of such 
things. But what all mankind, in the individual affairs 
of every-day life, regard as to be desired is not the 
making of things, but the possession of things. 



CHAPTER V. 

THE PROTECTIVE UNIT. 

THE more one considers the theory that every nation 
ought to "protect" itself against every other 
nation, the more inconsistent does it seem. 

Is there not, in the first place, an obvious absurdity in 
taking the nation or country as the protective unit and 
saying that each should have a protective tariff ? * What 
is meant by nation or country in the protectionist theory 
is an independent political division. Thus Great Britain 
and Ireland are considered one nation, France another, 

* That protectionist writers are themselves conscious of this 
absurdity is to be seen in their constant effort to suggest the idea, 
too preposterous to be broadly stated, that nations, instead of being 
purely arbitrary political divisions of mankind, are natural, or di- 
vinely appointed, divisions. Thus, not to multiply instances, Pro- 
fessor Eobert Ellis Thompson ("Political Economy," p. 34) defines a 
nation as "a people speaking one language, living under one govern- 
ment, and occupying a continuous area. This area is a district whose 
natural boundaries designate it as intended for the site of an inde- 
pendent people." This definition is given in large type, while 
underneath is appended in small type : "No one point of this defi- 
nition is essential save the second." Yet in spite of this admission 
that the "nation" is a purely arbitrary political division. Professor 
Thompson endeavors throughout his book to suggest a different 
impression to the mind of the reader, by talking of " the existence 
of nations as parts of the world's providential order," the "j^oviden- 
tial boiindaries of nations,'' etc. 

37 



2559.'i.'} 



38 PROTECTION OR FREE TRADE? 

Germany another, Switzerland another, the United States, 
Canada, Mexico, and each of the Central and South 
American republics are others. But these divisions are 
arbitrary. They do not coincide with any differences in 
soil, climate, race or industry— they have no maximum 
or minimum of area or population. They are, moreover, 
continu^y changing. The maps of Europe and America 
used by school-children to-day are very different from 
the maps their fathers used. The difference a hundred 
years ago was greater yet; and as we go further back 
still greater differences appear. According to this 
theory, when the three British kingdoms had separate 
governments it was necessary for the well-being of aU 
that they should be protected from each other, and 
should Ireland achieve independence that necessity 
would recur; but while the three countries are united 
under one government, it does not exist. The petty 
states of which a few years ago Germany and Italy con- 
sisted ought upon this theory to have had, as they once 
had, tariffs between them. Yet, now, upon the same 
theory, they no longer need these tariffs. Alsace and 
Lorraine when provinces of France needed to be pro- 
tected against Germany. Now that they are German 
provinces they need protection against France. Texas, 
when part of Mexico, required a protective tariff against 
the United States. Now, being a part of the United 
States, it requires a protective tariff against Mexico. We 
of the United States require a protective tariff against 
Canada, and the Canadians a tariff against us, but if 
Canada were to come into the Union the necessity for 
both of these tariffs would disappear. 

Do not these incongruities show that the protective 
theory is destitute of scientific basis; that instead of 
originating in any deduction from principles or induction 
from facts, it has been invented merely to serve the pur- 



THE PEOTECTIVE UNIT. 39 

poses of its inventors? Political changes in no wise alter 
soil, climate or industrial needs. If the three British 
kingdoms do not now need tariffs against one another, 
they could not have needed them before the union. If it 
is not injurious to the various states of Italy or Germany 
to trade freely with each other now, it could not have 
been injurious before they were united. If Alsace and 
Lorraine are benefited by free trade with Germany now, 
they would have been benefited by it when French prov- 
inces. If the people of the opposite shores of the Great 
Lakes and St. Lawrence River would not be injured by 
the free exchange of their products should Canada enter 
the American Union, they could not be injured by free- 
dom to exchange their products now. 

Consider how inconsistent with the protective theory 
is the free trade that prevails between the States of the 
American Union. Our Union includes an area almost as 
large as Europe, yet the protectionists who hold that 
each European country ought to protect itseK against all 
the rest make no objections to the free trade that exists 
between the American States, though some of these 
States are larger than Eui-opean kingdoms, and the dif- 
ferences between them, as to natural resources and indus- 
trial devefopment, are at least as great. If it is for the 
benefit of Germany and France that they should be sepa- 
rated by protective tariffs, does not New Jersey need the 
protection of a tariff from New York and Pennsylvania 1 
and do not New York and Pennsylvania also need to be 
protected from New Jersey ? And if New England needs 
protection against the Province of Quebec, and Ohio, 
Illinois and Michigan against the Province of Ontario, is 
it not clear that these States also need protection from 
the States which adjoin them on the south? What dif- 
ference does it make that one set of States belong to 
the American Union and the other to the Canadian Con- 



40 PROTECTION OR FREE TRADE? 

federation! Industry and commerce, when left to them- 
selves, pay no more attention to political lines than do 
birds or fishes. 

Clearly, if there is any truth in the protective theory it 
must apply not only to the grand political divisions but 
to all their parts. If a country ought not to import 
from other countries anything which its own people can 
produce, the same principle must apply to every sub- 
division ; and each State, each county and each township 
must need its own protective tariff. 

And further than this, the proper application of the 
protective theory requires the separation of mankind into 
the smallest possible political divisions, each defended 
against the rest by its own tariff. For the larger the 
area of the protective unit, the more difficult does it 
become to apply the protective theory. With every 
extension of such countries as the United States the 
possibility of protection, if it can be applied only to the 
major political divisions, becomes less, and were the 
poet's dream realized, and mankind united in a " Federa- 
tion of the World," the possibility of protection would 
vanish. On the other hand, the smaller the protective 
unit the better can the theory of protection be applied. 
Protectionists do not go so far as to aver that all trade 
is injurious. They hold that each country may safely 
import what it cannot produce, but should restrict the 
importation of what it can produce. Thus discrimina- 
tion is required, which becomes more possible the smaller 
the protective unit. 

Upon protective principles the same tariff will no 
better suit all the States of our Union than the same 
sized shoes will fit all our sixty million people. Massa- 
chusetts, for instance, does not produce coal, iron or 
sugar. These, then, on protective principles, ought to 
come into Massachusetts free, while Pennsylvania enjoyed 



THE PROTECTIVE UNIT. 41 

protection on iron and coal, and Louisiana on sugar. 
Oranges may be gi-own in Florida, but not in Minnesota ; 
therefore, while Florida needs a protective duty on 
oranges, Minnesota does not. And so on through the 
whole list of States. To "protect" them all with the 
same tariff is to ignore as to each that part of the protec- 
tive theory which permits the free importation of com- 
modities that cannot be produced at home; and, by 
compelling them to pay higher prices for what they 
cannot produce, to neutralize the benefits arising from 
the protection of such commodities as they do produce. 

Furthermore, while Massachusetts, on the protective 
theory, does not need protection on coal, iron and sugar, 
which she cannot produce, she does need protection 
against the beef, hogs and breadstuff s with which she is 
" deluged " from the West to the injury of her agricul- 
tural industries, and of which protection would enable 
her to raise enough for her home consumption. On the 
other hand, the West needs protection against the boots 
and shoes and woolens of Massachusetts, so that Western 
leather and wool could be worked up at home, instead of 
being carried long distances in raw form, to be brought 
back in finished form. In the same way the iron-workers 
of Ohio need protection against Pennsylvania more than 
they do against England, while it is only mockery to 
protect Rocky Mountain coal-miners against the coal of 
Nova Scotia, British Columbia and Australia, which 
cannot come into competition with them, while not pro- 
tecting them against the coal of Iowa ; or to protect the 
infant cotton-mills of the South against Old England 
while giving them no protection against New England. 

Upon the protective theory protection is most needed 
against like industries. All protectionists agree that the 
United States has greater need of protection against 
Great Britain than against Brazil ; and Canada against 



42 PROTECTION OR FREE TRADEt 

the United States than against India— all agree that if 
we must have free trade it should be with the countries 
most widely differing as to their productions from our 
own. Now there is far less difference between the pro- 
ductions and productive capacities of New Hampshire 
and Vermont, of Indiana and Illinois, or of Kansas and 
Nebraska, than there is between the United States as a 
whole and any foreign country. Therefore, on the pro- 
tective theory, tariffs between these States are more 
needed than between the United States and foreign 
countries. And since adjoining townships differ less in 
industrial capacities than adjoining States, they require 
protective tariffs aU the more. 

The thirteen American colonies came together as thir- 
teen independent sovereignties, each retaining the full 
power of taxation, including that of levying duty on 
imports, which was not given up by them until 1787, 
eleven years after the Declaration of Independence, when 
the Federal Constitution was adopted. If the protective 
theory, then dominant in Great Britain, had at that time 
had the hold upon the American people which it after- 
wards obtained, it is certain that the power of protecting 
themselves would never have been given up by the 
States. And had the Union continued as at first formed, 
or had the framers of the Constitution lacked the fore- 
sight to prohibit State tariffs, there is no doubt that 
when we came to imitate the British system of protec- 
tion we should have had as strong a demand in the 
various States for protection against other States as we 
have had for protection against foreign countries, and 
the arguments now used against free trade with foreign 
countries would to-day be urged against free trade 
between the States. 

Nor can there be any doubt that if our political organi- 
zation made our townships independent of one another, 



THE PROTECTIVE UNIT, 43 

we should have, in our townships and villages, the same 
clamor for protection against the industries of other 
townships and villages that we have now for the protec- 
tion of the nation against other nations. 

I am writing on Long Island, near the town of 
Jamaica. I think I could make as good an argument to 
the people of that little town as is made by the protec- 
tionists to the people of the United States. I could say 
to the shopkeepers of Jamaica, " Your townsmen now go 
to New York when they want to purchase a suit of 
clothes or a bill of dry-goods, leaving to you only the 
fag-ends of their custom, while the farmers' wagons that 
pass in a long line over the turnpike every night, carry- 
ing produce to New York and Brooklyn, bring back sup- 
plies the next day. A protective tariff will compel these 
purchases to be made here. Thus profits that now go to 
New York and Brooklyn will be retained in Jamaica; 
you will want larger stores and better houses, can pay 
your clerks and journeymen higher wages, will need 
more banking accommodations, will advertise more 
freely in Jamaican newspapers, and thus wiU the town 
grow and prosper." 

"Moreover," I might say, "what a useless waste of 
labor there is in carrying milk and butter, chickens, eggs 
and vegetables to New York and Brooklyn and bringing 
back other things. How much better for our farmers if 
they had a home market. This we can secure for them 
by a tariff that will protect Jamaican industries against 
those of New York and Brooklyn. Clothing, cigars, 
boots and shoes, agricultural implements and furniture 
may be manufactured here as well as in those cities. 
Why should we not have a cotton-factory, a woolen-mill, 
a foundry, and, in short, aU the establishments necessary 
to supply the wants of our people? To get them we 
need only a protective tariff. Capital, when assured of 



44 PROTECTION OR FREE TRADE? 

protection, will be gladly forthcoming for such enter- 
prises, and we shall soon be exporting what we now 
import, while our farmers will find a demand at their 
doors for all their produce. Even if at first they do 
have to pay somewhat higher prices for what they buy 
they will be much more than compensated by the higher 
prices they will get for what they sell, and will save an 
eight- or ten-mile haul to Brooklyn or New York. Thus, 
instead of Jamaica remaining a little village, the indus- 
tries which a protective tariff will build up here will 
make it a large town, whUe the increased demand for 
labor will make wages higher and employment steadier." 

I submit that all this is at least as valid as the protec- 
tive arguments that are addressed to the people of the 
whole United States, and no one who has listened to the 
talk of village shopkeepers or noticed the comments of 
local newspapers can doubt that were our townships 
independent, village protectionists could get as ready a 
hearing as national protectionists do now. 

But to follow the protective theory to its logical con- 
clusions we cannot stop with protection between State 
and State, township and township, village and village. 
If protection be needful between nations, it must be 
needful not only between political sub-divisions, but 
between family and family. If nations should never buy 
of other nations what they might produce at home, the 
same principle must forbid each family to buy anything 
it might produce. Social laws, like physical laws, must 
apply to the molecule as well as to the aggregate. But 
a social condition in which the principle of protection 
was thus fully carried out would be a condition of utter 
barbarism. 



CHAPTER VI. 

TRADE. 

PROTECTION implies prevention. To protect is to 
preserve or defend. 

What is it that protection by tariff prevents? It is 
trade. To speak more exactly, it is that part of trade 
which consists in bringing in from other countries com- 
modities that might be produced at home. 

But ti*ade, from which "protection" essays to preserve 
and defend us, is not, like flood, earthquake, or tornado, 
something that comes without human agency. Trade 
implies human action. There can be no need of preserv- 
ing from or defending against trade, unless there are 
men who want to trade and try to trade. Who, then, 
are the men against whose efforts to trade "protection" 
preserves and defends us ? 

If I had been asked this question before I had come to 
think over the matter for myself, I should have said that 
the men against whom "protection" defends us are 
foreign producers who wish to sell their goods in our 
home markets. This is the assumption that runs 
through all protectionist arguments — the assumption 
that foreigners are constantly trying to force their prod- 
ucts upon us, and that a protective tariff is a means for 
defending ourselves against what they want to do. 

Yet a moment's thought will show that no effort of 
foreigners to sell us their products could of itself make a 

45 



46 PROTECTION OR FREE TRADE! 

tariff necessary. For the desire of one party, however 
strong it may be, cannot of itseK bring about trade. To 
every ti*ade there must be two parties who mutually 
desire to trade, and whose actions are reciprocal. No 
one can buy unless he can find some one willing to sell ; 
and no one can sell unless there is some other one will- 
ing to buy. K Americans did not want to buy foreign 
goods, foreign goods could not be sold here even if there 
were no tariff. The efficient cause of the trade which 
our tariff aims to prevent is the desire of Americans to 
buy foreign goods, not the desire of foreign producers to 
sell them. Thus protection really prevents what the 
"protected" themselves want to do. It is not from 
foreigners that protection preserves and defends usj it 
is from ourselves. 

Trade is not invasion. It does not involve aggression 
on one side and resistance on the other, but mutual con- 
sent and gratification. There cannot be a trade unless 
the parties to it agree, any more than there can be a 
quarrel unless the parties to it differ. England, we say, 
forced trade with the outside world upon China, and the 
United States upon Japan. But, in both cases, what was 
done was not to force the people to trade, but to force 
their governments to let them. If the people had not 
wanted to trade, the opening of the ports would have 
been useless. 

Civilized nations, however, do not use their armies and 
fleets to open one another's ports to trade. What they 
use their armies and fleets for, is, when they quarrel, to 
close one another's ports. And their effort then is to 
prevent the carrying in of things even more than the 
bringing out of things— importing rather than exporting. 
For a people can be more quickly injured by preventing 
them from getting things than by preventing them from 
sending things away. Trade does not require force. 



TRADR 47 

Free trade consists simply in letting people buy and sell 
as they want to buy and sell. It is protection that 
requires force, for it consists in preventing people from 
doing what they want to do. Protective tariffs are as 
much applications of force as are blockading squadrons, 
and their object is the same— to prevent trade. The 
difference between the two is that blockading squadrons 
are a means whereby nations seek to prevent their 
enemies from trading; protective tariffs are a means 
whereby nations attempt to prevent their own people 
from trading. What protection teaches us, is to do to 
ourselves in time of peace what enemies seek to do to us 
in time of war. 

Can there be any greater misuse of language than to 
apply to commerce terms suggesting strife, and to talk 
of one nation invading, deluging, overwhelming or inun- 
dating another with goods ? Goods ! what are they but 
good things— things we are aU glad to get? Is it not 
preposterous to talk of one nation forcing its good things 
upon another nation ? Who individually would wish to 
be preserved from such invasion ? Who would object to 
being inundated with all the dress-goods his wife and 
daughters could want ; deluged with a horse and buggy ; 
overwhelmed with clothing, with groceries, with good 
cigars, fine pictures, or anything else that has vsdueT 
And who would take it kindly if any one should assume 
to protect him by driving off those who wanted to bring 
him such things 1 

In point of fact, however, not only is it impossible for 
one nation to sell to another, unless that other wants to 
buy, but international trade does not consist in sending 
out goods to be sold. The great mass of the imports of 
every civili2ed country consists of goods that have been 
ordered by the people of that country and are imported 
at their risk. This is true even in our own case, 



AB PROTECTION OR FREE TRADE? 

although one of the effects of our tariff is that many 
goods that otherwise would be imported by Americans 
are sent here by European manufacturers, because 
undervaluation is thus made easier. 

But it is not the importer who is the cause of importa- 
tion. Whether goods are brought here by American 
importers or sent here by foreign exporters, the cause of 
their coming here is that they are asked for by the 
American people. It is the demand of purchasers at 
retail that causes goods to be imported. Thus a protec- 
tive tariff is a prevention by a people not of what others 
want to do to them, but of what they themselves want 
to do. 

When in the common use of the word we speak of 
individuals or communities protecting themselves, there 
is always implied the existence of some external enemy 
or danger, such as cold, heat or accident, savage beasts 
or noxious vermin, fire or disease, robbers or invaders; 
something disposed to do what the protected object to. 
The only cases in which the common meaning of the 
word does not imply some external enemy or danger are 
those in which it implies some protector of superior 
intelligence, as when we speak of imbeciles, lunatics, 
drunkards or young children being protected against 
their own irrational acts. 

But the systems of restriction which their advocates 
have named " protective " lack both the one and the other 
of these essential qualities of real protection. What 
they defend a people against is not external enemies or 
dangers, but what that people themselves want to do. 
Yet this " protection " is not the protection of a superior 
intelligence, for human wit has not yet been able to 
devise any scheme by which any intelligence can be 
secured in a Parliament or Congress superior to that of 
the people it represents. 



TRADE. 49 

That where protective tariffs are imposed it is in 
accordance with the national will I do not deny. What 
I wish to point out is that even the people who thus 
impose protective tariffs upon themselves still want to do 
what by protective tariffs they strive to prevent them- 
selves from doing. This is seen in the tendency of 
importation to continue in spite of tariffs, in the disposi- 
tion of citizens to evade their tariff whenever they can, 
and in the fact that the very same individuals who 
demand the imposition of tariffs to prevent the importa- 
tion of foreign commodities are among the individuals 
whose demand for those commodities is the cause of 
their importation. Given a people of which every man, 
woman and child is a protectionist, and a tariff unani- 
mously agreed upon, and still that tariff will be a restric- 
tion upon what these people want to do and will stiQ try 
to do. Protectionists are only protectionists in theory 
and in politics. When it comes to buying what they 
want all protectionists are free traders. I say this to 
point out not the inconsistency of protectionists, but 
something more significant. 

"I write." "I breathe." Both propositions assert 
action on the part of the same individual, but action of 
different kinds. I write by conscious volition ; I breathe 
instinctively. I am conscious that I breathe only when 
I think of it. Yet my breathing goes on whether I think 
of it or not— when my consciousness is absorbed in 
thought, or is dormant in sleep. Though with all my 
will I try to stop breathing, I yet, in spite of myself, try 
to breathe, and will continue that endeavor while life 
lasts. Other vital functions are even further beyond 
consciousness and will. We live by the continuous car- 
rying on of multifarious and delicate processes apparent 
only in their results and utterly irresponsive to mental 
direction. 



BO PROTECTION OR FREE TRADE? 

Between the man and the community there is in these 
respects an analogy which becomes closer as civilization 
progresses and social relations grow more complex. That 
power of the whole which is lodged in governments is 
limited in its field of consciousness and action much as 
the conscious will of the individual is limited, and even 
that consensus of personal beliefs and wishes termed 
public opinion is but little wider in its range. There is, 
beyond national direction and below national conscious- 
ness, a life and relation of parts and a performance of 
functions which are to the social body what the vital 
processes are to the physical body. 

What would happen to the individual if all the func- 
tions of the body were placed under the control of the 
consciousness, and a man could forget to breathe, or 
miscalculate the amount of gastric juice needed by his 
stomach, or blunder as to what his kidneys should take 
from the blood, is what would happen to a nation in 
which all individual activities were directed by govern- 
ment. 

And though a people collectively may institute a tariff 
to prevent trade, their individual wants and desires will 
still force them to try to trade, just as when a man ties a 
ligature round his arm, his blood will still try to circulate. 
For the effort of each to satisfy his desires with the 
least exertion, which is the motive of trade, is as instinc- 
tive and persistent as are the instigations which the vital 
organs of the body obey. It is not the importer and the 
exporter who are the cause of trade, but the daily and 
hourly demands of those who never think of importing 
or exporting, and to whom trade carries that which they 
demand, just as the blood carries to each fiber of the 
body that for which it calls. 

It is as natural for men to trade as it is for blood to 
circulate. Man is by nature a trading animal, impelled 



TRADE. 51 

to trade by persistent desires, placed in a world where 
everything shows that he was intended to trade, and 
finding in trade the possibility of social advance. With- 
out trade man would be a savage. 

Where each family raises its own food, builds its own 
house, makes its own clothes and manufactures its own 
tools, no one can have more than the barest necessaries 
of Uf e, and every local failure of crops must bring famine. 
A people living in this way will be independent, but their 
independence will resemble that of the beasts. They will 
be poor, ignorant, and all but powerless against the 
forces of nature and the vicissitudes of the seasons. 

This social condition, to which the protective theory 
would logically lead, is the lowest in which man is ever 
found— the condition from which he has toiled upward. 
He has progressed only as. he has learned to satisfy his 
wants by exchanging with his fellows and has freed and 
extended trade. The difference between naked savages 
possessed of only the rudiments of the arts, cowering in 
ignorance and weakness before the forces of nature, and 
the wealth,the knowledge and the power of our highest civi- 
lization, is due to the exchange of the independence which 
is the aim of the protective system, for that interdepen- 
dence which comes with trade. Men cannot apply them- 
selves to the production of but one of the many things 
human wants demand unless they can exchange their 
products for the products of others. And thus it is only 
as the growth of trade permits the division of labor that, 
beyond the merest rudiments, skill can be developed, 
knowledge acquired and invention made; and that pro- 
ductive power can so gain upon the requirements for 
maintaining life that leisure becomes possible and capital 
can be accumulated. 

If to prevent trade were to stimulate industry and 
promote prosperity, then the localities where he was most 



52 PEOTECTION OR FREE TRADEt 

isolated would show the first advances of man. The 
natural protection to home industry afforded by rugged 
mountain-chains, by burning deserts, or by seas too wide 
and tempestuous for the fraU bark of the early mariner, 
would have given us the first glimmerings of civilization 
and shown its most rapid growth. But, in fact, it is 
where trade could best be carried on that we find wealth 
first accumulating and civilization beginning. It is on 
accessible harbors, by navigable rivers and much-traveled 
highways that we find cities arising and the arts and 
sciences developing. And as trade becomes free and 
extensive— as roads are made and navigation improved ; 
as pirates and robbers are extirpated and treaties of peace 
put an end to chronic warfare— so does wealth augment 
and civilization grow. All our great labor-saving inven- 
tions, from that of money to that of the steam-engine, 
spring from trade and promote its extension. Trade has 
ever been the extinguisher of war, the eradicator of pre- 
judice, the diffuser of knowledge. It is by trade that 
useful seeds and animals, useful arts and inventions, 
have been carried over the world, and that men in one 
place have been enabled not only to obtain the products, 
but to profit by the observations, discoveries and inven- 
tions of men in other places. 

In a world created on protective principles, all habi- 
table parts would have the same soil and climate, and be 
fitted for the same productions, so that the inhabitants 
of each locality would be able to produce at home aU 
they required. Its seas and rivers would not lend them- 
selves to navigation, and every little section intended for 
the habitation of a separate community would be guarded 
by a protective mountain-chain. If we found ourselves 
in such a world, we might infer it to be the intent of 
nature that each people should develop its own indus- 
tries independently of all others. But the world in 



TRADE. 03 

which we do find ourselves is not merely adapted to 
intercommunication, but what it yields to man is so dis- 
tributed as to compel the people of different localities to 
trade with each other to satisfy fully their desires. The 
diversities of soil and climate, the distribution of water, 
wood and mineral deposits, the currents of sea and air, 
produce infinite differences in the adaptation of different 
parts to different productions. It is not merely that one 
zone jdelds sugar and coffee, the banana and the pine- 
apple, and another wheat and barley, the apple and the 
potato ; that one supplies furs and another cotton ; that 
here are hillsides adapted to pasture and there valleys 
fitted for the plow ; here granite and there clay ; ia one 
place iron and coal and in another copper and lead ; but 
that there are differences so delicate that, though experi- 
ence teUs us they exist, we cannot say to what they are 
due. Wine of a certain quality is produced in one place 
which cuttings from the same vines will not yield in 
another place, though soil and climate seem alike. Some 
localities, without assignable reason, become renowned 
for productions of one kind and some for productions of 
another kind; and experience often shows that plants 
thrive differently in different parts of the same field. 
These endless diversities, in the adaptation of different 
parts of the earth's surface to the production of the 
different things required by man, show that nature has 
not intended man to depend for the supply of his wants 
upon his own production, but to exchange with his fel- 
lows, just as the placing of the meat before one guest at 
table, the vegetables before another, and the bread before 
another, shows the intent of the host that they should 
help one another. 

Other natural facts have similar bearing. It has long 
been known that to obtain the best crops the farmer 
should not sow with seed grown in his own fields, but 



64 PROTECTION OR FREE TRADE? 

with seed brought from afar. The strain of domestic 
animals seems always improved by imported stock, even 
poultry-breeders finding it best to sell the male birds 
they raise and supply their places with cocks brought 
from a distance. Whether or not the same law holds 
true with regard to the physical part of man, it is certain 
that the admixture of peoples produces stimulating mental 
effects. Prejudices are worn down, wits are sharpened, 
language enriched, habits and customs brought to the 
test of comparison and new ideas enkindled. The most 
progressive peoples, if not always of mixed blood, have 
always been the peoples who came most in contact with 
and learned most from others. "Home-keeping youths 
have ever homely wits" is true of nations. 

And, further than this, it is characteristic of all the in- 
ventions and discoveries that are so rapidly increasing our 
power over nature that they require the greater division 
of labor, and extend trade. Thus every step in advance 
destroys the independence and increases the interdepen- 
dence of men. The appointed condition of human progress 
is evidently that men shall come into closer relations and 
become more and more dependent upon each other. 

Thus the restrictions which protectionism urges us to 
impose upon ourselves are about as well calculated to 
promote national prosperity as ligatures, that would 
impede the circulation of the blood, would be to promote 
bodily health and comfort. Protection calls upon us to 
pay officials, to encourage spies and informers, and to 
provoke fraud and perjury, for what 1 Why, to preserve 
ourselves from and protect ourselves against something 
which offends no moral law ; something to which we are 
instinctively impelled; something without which we 
could never have emerged from barbarism, and some- 
thing which physical nature and social laws alike prove 
to be in conformity with the creative intent. 



TRADE. 55 

It is true that protectionists do not condemn all trade, 
and though some of them have wished for an ocean of 
fire to bar out foreign products, others, more reasonable 
if less logical, would permit a country to import things it 
cannot produce. The international trade which they 
concede to be harmless amounts not to a tenth and per- 
haps not to a twentieth of the international trade of the 
world, and, so far as our own country is concerned, the 
things we could not obtain at home amount to little 
more than a few productions of the torrid zone, and even 
these, if properly protected, might be grown at home by 
artificial heat, to the incidental encom*agement of the 
glass and coal industries. But, so far as the correctness 
of the theory goes, it does not matter whether the trade 
which " protection " would permit, as compared with that 
it would prevent, be more or less. What " protection " 
calls on us to preserve ourselves from, and guard our- 
selves against, is trade. And whether trade be between 
citizens of the same nation or citizens of different 
nations, and whether we get by it things that we could 
produce for ourselves or things that we could not pro- 
duce for ourselves, the object of trade is always the 
same. If I trade with a Canadian, a Mexican, or an 
Englishman it is for the same reason that I trade with 
an American— that I would rather have the thing he 
gives me than the thing I give him. Why should I 
refuse to trade with a foreigner any more than with a 
fellow-citizen when my object in trading is my advan- 
tage, not his ? And is it not in the one case, quite as 
much as in the other, an injury to me that my trade 
should be prevented? What difference does it make 
whether it would be possible or impossible for me to 
make for myself the thing for which I trade? If I did 
not want the thing I am to get more than the thing I am 
to give, I would not wish to make the trade. Here is a 



56 PROTECTION OK FREE TRADE? 

farmer who proposes to exchange with his neighbor a 
horse he does not want for a couple of cows he does 
want. Would it benefit these farmers to prevent this 
trade on the ground that one might breed his own horses 
and the other raise his own cows? Yet if one farmer 
lived on the American and the other lived on the Cana- 
dian side of th,e line this is just what both the American 
and Canadian governments would do. And this is 
called "protection." 

It is only one of the many benefits of trade that it 
enables people to obtain what the natural conditions of 
their own localities would not enable them to produce. 
This is, however, so obvious a benefit that protectionists 
cannot altogether ignore it, and a favorite doctrine with 
American protectionists is that trade ought to foUow 
meridians of longitude instead of parallels of latitude, 
because the great differences of climate and consequently 
of natural productions are between north and south.* 
The most desirable reconstruction of the world on this 
theory would be its division into " countries " consisting 
of narrow strips running from the equator to the poles, 
with high tariffs on either side and at the equatorial end, 
for the polar ice would serve the purpose at the other. 
But in the meantime, despite this notion that trade 
ought to be between north and south rather than 
between east and west, the fact is that the great com- 
merce of the world is and always has been between east 
and west. And the reason is clear. It is that peoples 

* " This, then, is our position respecting commerce . . . that it 
should interchange the productions of diverse zones and climates, 
following in its transoceanic voyages lines of longitude oftener than 
lines of latitude."— Horace Greeley, Political Economy, p. 39. 

" Legitimate and natural commerce moves rather along the merid- 
ians than along the parallels of latitude."— Professor Robert 
Ellis Thompson, FoUtical Economy, p. 217. 



TRADK 67 

most alike in habits and needs wiU call most largely for 
each other's productions, and that the course of migra- 
tion and of assimilating influences has been rather 
between east and west than between north and south. 

Difference in latitude is but one element of difference 
in climate, and difference in climate is but one element 
of the endless diversity in natm*al productions and capa- 
cities. In no one place will nature yield to labor all that 
man finds useful. Adaptation to one class of products 
involves non-adaptation to others. Trade, by permitting 
us to obtain each of the things we need from the locality 
best fitted for its production, enables us to utilize the 
highest powers of nature in the production of them all, 
and thus to increase enormously the sum of various 
things which a given quantity of labor expended in any 
locality can secure. 

But, what is even more important, trade also enables 
us to utilize the highest powers of the human factor in 
production. AU men cannot do aU things equally well. 
There are differences in physical and mental powers 
which give different degrees of aptitude for different parts 
of the work of supplying human needs. And far more 
important still are the differences that arise from the 
development of special skill. By devoting himself to one 
branch of production a man can acquire skill which 
enables him, with the same labor, to produce enormously 
more than one who has not made that branch his spe- 
cialty. Twenty boys may have equal aptitude for any one 
of twenty trades, but if every boy tries to learn the 
twenty trades, none of them can become a good workman 
in any ; whereas, if each devotes himself to one trade, all 
may become good workmen. There wiU not only be a 
saving of the time and effort required for learning, but 
each, moreover, can in a single vocation work to much 
better advantage, and may acquire and use tools which 



58 PBOTECTION OR FREE TRADE! 

it would be impossible to obtain and employ did each 
attempt the whole twenty. 

And as there are differences between individuals which 
fit them for different branches of production, so, but to a 
much greater degree, are there such differences between 
communities. Not to speak again of the differences due 
to situation and natural facilities, some things can be 
produced with greater relative advantage where popula- 
tion is sparse, others where it is dense, and differences in 
industrial development, in habits, customs and related 
occupations, produce differences in relative adaptation. 
Such gains, moreover, as attend the division of labor 
between individuals, attend also the division of labor 
between communities, and lead to that localization of 
industry which causes different places to become noted 
for different industries. Wherever the production of 
some special thing becomes the leading industry, skill is 
more easily acquired, and is carried to a higher pitch, 
supplies are most readily procured, auxiliary and correl- 
ative occupations grow up, and a larger scale of produc- 
tion leads to the employment of more efficient methods. 
Thus in the natural development of society trade brings 
about differentiations of industry between communities 
as between individuals, and with similar benefits. 

Men of different nations trade with each other for the 
same reason that men of the same nation do — because 
they find it profitable; because they thus obtain what 
they want with less labor than they otherwise could. 
Goods will not be imported into any country unless they 
can be obtained more easily by producing something else 
and exchanging it for them, than by producing them 
directly. And hence, to restrict importations must be to 
lessen productive power and reduce the fund from which 
aU revenues are drawn. 

Any one can see what would be the result of forbidding 
each individual to obtain from another any commodity 



TBABE. 69 

or service which he himself was naturally fitted to pro- 
duce or perform. Such a regulation, were any govern- 
ment mad enough to adopt it and powerful enough to 
maintain it, would paralyze the forces that make civiliza- 
tion possible and soon convert the most populous and 
wealthy country into a howling wilderness. The restric- 
tions which protection would impose upon foreign trade 
differ only in degree, not in kind, from such restrictions 
as these. They would not reduce a nation to barbarism, 
because they do not affect all trade, and rather hamper 
than prohibit the trade they do affect; but they must 
prevent the people that adopt them from obtaining the 
abundance they might otherwise enjoy. If the end of 
labor be, not the expenditure of effort, but the securing 
of results, then whether any particular thing ought to be 
obtained in a country by home production, or by impor- 
tation, depends solely upon which mode of obtaining it 
will give the largest result to the least labor. This is 
a question involving such complex considerations that 
what any country ought to obtain in this way or in that 
cannot be settled by any Congress or Parliament. It can 
safely be left only to those sure instincts which are to 
society what the vital instincts are to the body, and which 
always impel men to take the easiest way open to them 
to reach their ends. 

When not caused by artificial obstacles, any tendency 
in trade to take a certain course is proof that it ought to 
take that course, and restrictions are harmful because 
they restrict, and in proportion as they restrict. To 
assert that the way for men to become healthy and 
strong is for them to force into their stomachs what 
nature tries to reject, to regulate the play of their lungs 
by bandages, or to control the circulation of their blood 
by ligatures, would be not a whit more absurd than to 
assert that the way for nations to become rich is for 
them to restrict the natural tendency to trade. 



CHAPTER Vn. 

PRODUCmON AND PRODUCERS. 

E EMOTE from neighbors, in a part of the country 
) where population is only beginning to come, stan^ 
the rude house of a new settler. As the stars come out, 
a ruddy light gleams from the little window. The 
housewife is preparing a meal. The wood that bums so 
cheerily was cut by the settler, the flour now turning 
into bread is from wheat of his raising; the fish hiss- 
ing in the pan were caught by one of the boys, and the 
water bubbling in the kettle, in readiness to be poured 
on the tea, was brought from the spring by the eldest 
girl before the sun had set. 

The settler cut the wood. But it took more than that 
to produce the wood. Had it been merely cut, it would 
still be lying where it fell. The labor of hauling it was 
as much a part of its production as the labor of cutting 
it. So the journey to and from the miU was as necessary 
to the production of the flour as the planting and reaping 
of the wheat. To produce the fish the boy had to walk 
to the lake and trudge back again. And the production 
of the water in the kettle required not merely the exer- 
tion of the girl who brought it from the spring, but also 
the sinking of the barrel in which it collected, and the 
making of the bucket in which it was carried. 

As for the tea, it was grown in China, was carried on 
a bamboo pole upon the shoulders of a man to some river 

6Q, 



PRODUCTION AND PRODUCERS. 61 

village, and sold to a Chinese merchant, who shipped it 
by boat to a treaty port. There, having been packed for 
ocean transportation, it was sold to the agency of some 
American house, and sent by steamer to San Francisco. 
Thence it passed by railroad, with another transfer of 
ownership, into the hands of a Chicago jobber. The 
jobber, in turn, in pursuance of another sale, shipped it 
to the village storekeeper, who held it so that the settler 
might get it when and in such quantities as he pleased, 
just as the water from the spring is held in the sunken 
barrel so that it may be had when needed. 

The native dealer who first purchased this tea of the 
grower, the merchant who shipped it across the Pacific, 
the Chicago jobber who held it as in a reservoir until the 
storekeeper ordered it, the storekeeper who, bringing it 
from Chicago to the village, held it as in a smaller reser- 
voir until the settler came for it, as weU as those con- 
cerned in its transportation, from the coolie who carried 
it to the bank of the Chinese river to the brakemen of 
the train that brought it from Chicago— were they not 
all parties to the production of that tea to this family as 
truly as were the peasants who cultivated the plant and 
gathered its leaves ? 

The settler got the tea by exchanging for it money 
obtained in exchange for things produced from nature 
by the labor of himself and his boys. Has not this tea, 
then, been produced to this family by their labor as truly 
as the wood, the flour or the water? Is it not true that 
the labor of this family devoted to producing things 
which were exchanged for tea has really produced tea, 
even in the sense of causing it to be grown, cured and 
transported ? It is not the growing of the tea in China 
that causes it to be brought to the United States. It is 
the demand for tea in the United States— that is to say, 
the readiness to give other products of labor for it— that 



62 PROTECTION OR FREE TRADE? 

causes tea to be grown in China lor shipment to the 
United States. 

To produce is to bring forth, or to bring to. There is 
no other word in our language which includes at once 
all the operations, such as catching, gathering, extracting, 
growing, breeding or making, by which human labor 
brings forth from nature, or brings to conditions adapted 
to human uses, the material things desired by men and 
which constitute wealth. When, therefore, we wish to 
speak collectively of the operations by which things are 
secured, or fitted for human use, as distinguished from 
operations which consist in moving them from place to 
place or passing them from hand to hand after they have 
been so secured or fitted, we are obliged to use the word 
production in distinction from transportation or exchange. 
But we should always remember that this is but a nar- 
row and special use of the word. 

While in conformity with the usages of our language 
we may properly speak of production as distinguished 
from transportation and exchange, just as we may prop- 
erly speak of men as distinguished from women and 
children, yet in its full meaning, production includes 
transportation and exchange, just as men includes 
women and children. In the narrow meaning of the 
word we speak of coal as having been produced when it 
has been moved from its place in the vein to the surface 
of the ground; but evidently the moving of the coal 
from the mouth of the mine to those who are to use it is 
as necessary a part of coal production, in the full sense, 
as is the bringing of it to the surface. And while we 
may produce coal in the United States by digging it out 
of the ground, we may also just as truly produce it by 
exchanging other products of labor for it. Whether we 
get coal by digging it or by bringing it from Nova 
Scotia or Australia or England in exchange for other 



PRODUCTION AND PEODUCEBS. 63 

products of our labor, it is, in the one case as truly as in 
the other, produced here by our labor. 

Through all protectionist arguments runs the notion 
that transporters and traders are non-producers, whose 
support lessens the amount of wealth which other classes 
can enjoy.* This is a short-sighted view. In the full 
sense of the term transporters and traders are as truly 
producers as are miners, farmers or manufacturers, since 
the transporting of things and the exchanging of things 
are as necessary to the enjoyment of things as is extract- 
ing, growing or making. There are some operations 
conducted under the forms of trade that are in reality 
gambling or blackmailing, but this does not alter the 
fact that real trade, which consists in exchanging and 
transporting commodities, is a part of production— a part 
so necessary and so important that without it the other 
operations of production could only be carried on in the 
most primitive manner and with the most niggard 
results. 

And not least important of the functions of the trader 
is that of holding things in stock, so that those who wish 
to use them may be able to get them at such times and 
places, and in such quantities, as are most convenient. 
This is a sei'vice analogous to that performed by the 
sunken barrel which holds the water of a spring so that 
it can be had by the bucketful when needed, or by the 

* "In my conception, the chief end of a true political economy is 
the conversion of idlers and useless exchangers and traffickers into 
habitual, effective producers of wealth."— Horace Greeley, Politi- 
cal Economy, p. 29. 

The trader "adds nothing to the real wealth of society. He 
neither directs and manages a vital change in the form of matter 
as does the farmer, nor a chemical and mechanical change in form as 
does the manufacturer. He merely transfers things from the place 
of their production to the place of demand."— Propessoe R. E. 
Thompson, Political Economy, p. 198. 



64 PROTECTION OR FREE TRADEt 

reservoirs and pipes which enable the inhabitant of a city 
to obtain water by the turning of a faucet. The profits 
of traders and "middlemen" may sometimes be exces- 
sive (and anything which hampers trade and increases 
the capital necessary to carry it on tends to make them 
excessive), but they are in reality based upon the per- 
formance of services in holding and distributing things 
as well as in transporting things. 

When Charles Fourier was young [says Professor Thompson 
(Political Ecoiwmy, p. 199)], he was on a visit to Paris, and priced at 
a street stall some apples of a sort that grew abundantly in his 
native province. He was amazed to find that they sold for many 
times the sum they would bring at home, having passed through the 
hands of a host of middlemen on their way from the owner of the 
orchard to the eater of the fruit. The impression received at that 
instant never left him ; it gave the first impulse to his thinking out 
his socialistic scheme for the reconstruction of society, in which 
among other sweeping changes the whole class of traders and their 
profits are to be abolished. 

This story, quoted approvingly to convey an idea that 
the trader is a mere toll-gatherer, simply shows what a 
superficial thinker Fourier was. If he had undertaken 
to bring with him to Paris a supply of apples and to 
carry them around with him so that he could have one 
when he felt like it he would have formed a much truer 
idea of what he was really paying for in the increased 
price. That price included not merely the cost of the 
apple at its place of growth, plus the cost of transporting 
it to Paris, the octroi at the Paris gates,* the loss of dam- 
aged apples, and remuneration for the service and capital 
of the wholesaler, who held the apples in stock until the 

• The octroi, or mimicipal tariff on produce brought into a town, 
is still levied in France, though abolished for a time by the Revolu- 
tion. It is a survival of the local tariffs once common in Eiirope, 
which separated province from province and town from country. 



PRODUCTION AND PRODUCERS. 66 

vender chose to take them, but also payment to the 
vender, for standing all day in the streets of Paris, in 
order to supply a few apples to those who wanted an 
apple then and there. 

So when I go to a druggist's and buy a small quantity 
of medicine or chemicals I pay many times the original 
cost of those articles, but what I thus pay is in much 
larger degree wages than profit. Out of such small sales 
the druggist must get not only the cost of what he sells 
me, with other costs incidental to the business, but also 
payment for his services. These services consist not 
only in the actual exertion of giving me what I want, 
but in waiting there in readiness to serve me when I 
choose to come. In the price of what he sells me he makes 
a charge for what printers call " waiting time." And he 
must manifestly not merely charge "waiting time" for 
himself, but also for the stock of many different things 
only occasionally called for, which he must keep on 
hand. He has been waiting there, with his stock, in 
anticipation of the fact that such persons as myself, in 
sudden need of some small quantities of drugs or chemi- 
cals, would find it cheaper to pay him many times their 
wholesale cost than to go farther and buy larger quanti- 
ties. What I pay him, even when it is not payment for 
the skilled labor of compounding, is largely a payment 
of the same nature as, were he not there, I might have 
had to make to a messenger. 

If each consumer had to go to the producer for the 
small quantities individually demanded, the producer 
would have to charge a higher price on account of the 
greater labor and expense of attending to such small 

Colbert, the first Napoleon, and the German ZoUverein did much in 
reducing and abolishing these restrictions to trade, producing in 
this way good results which are sometimes attributed by protec- 
tionists to external tariffs. 



66 PROTECTION OR FREE TRADEt 

transactions. A hundred cases of shoes may be sold at 
wholesale in less time than would be consumed in suiting 
a customer with a single pair. On the other hand, the 
going to the producer direct would involve an enormous 
increase of cost and trouble to the consumer, even when 
such a method of obtaining things would not be utterly 
impossible. 

What "middlemen" do is to save to both parties this 
trouble and expense, and the profits which competition 
permits them to charge in return are infinitesimal as 
compared with the enormous savings effected— are like 
the charge made to each consumer for the cost of the 
aqueducts, mains and pumping-engines of a great system 
of water-supply as compared with the cost of providing 
a separate system for each house. 

And further than this, these middlemen between pro- 
ducer and consumer effect an enormous economy in the 
amount of commodities that it is necessary to keep in 
stock to provide for a given consumption, and conse- 
quently vastly lessen the loss from deterioration and 
decay. Let any one consider what amount of stores 
would be needed to keep in their accustomed supply 
even for a month a family used to easy access to those 
handy magazines of commodities which retail dealers 
maintain. He will see at once that there are a number 
of things such as fresh meat, fish, fruits, etc., which it is 
impossible to keep on hand, so as to be sure of having 
them when needed. And of the things that would keep 
longer, such as flour, sugar, oil, etc., he will see that but 
for the retail dealer it would be necessary that much 
greater quantities should be kept in each house, with a 
much greater liability to loss from decay or accident. 
But it is when he comes to things not constantly needed, 
but which, when needed, though it may not be once a 
year or once a lifetime, may be needed very badly— that 



PEODUCTION AND PEODUCEES. 67 

he will realize fully how the much-abused "middleman" 
economizes the capital of society and increases the oppor- 
tunities of its members. 

A retail dealer is called by the English a " shopkeeper" 
and by the Americans a "storekeeper." The American 
usage best expresses his real function. He is in reality 
a keeper of stores which otherwise his customers would 
have to keep on hand for themselves, or go without. 
The English speak of the shops of cooperative supply 
associations as " stores," since it is in them that the vari- 
ous things required from time to time by the members of 
those associations are stored until called for. But this 
is precisely what, without any formal association, the 
retail dealer does for those who buy of him. And 
though cooperative purchasing associations have to a 
certain extent succeeded in England (they have generally 
failed in the United States) there can be no question that 
the functions of keeping things in store and distributing 
them to consumers as needed are on the whole performed 
more satisfactorily and more economically by self- 
appointed store- or stock-keepers than they could be as 
yet by formal associations of consumers. And the ten- 
dencies of the time to economies in the distribution as 
well as in the production of commodities, are bringing 
about through the play of competition just such a saving 
of expense to the consumer as is aimed at by cooperative 
supply associations. 

That in civilized society to-day there seem to be too 
many storekeepers and other distributors is quite true. 
But so there seem to be too many professional men, too 
many mechanics, too many farmers, and too many 
laborers. What may be the cause of this most curious 
state of things it may hereafter lie in our way to inquire, 
but at present I am only concerned in pointing out that 
the trader is not a mere ''useless exchanger," who "adds 



68 PROTECTION OR FREE TRADE? 

nothing to the real wealth of society," but that the trans- 
porting, storing and exchanging of things are as neces- 
sary a part of the work of supplying human needs as is 
growing, extracting or making. 

Nor should it be forgotten that the investigator, the 
philosopher, the teacher, the artist, the poet, the priest, 
though not engaged in the production of wealth, are not 
only engaged in the production of utilities and satisfac- 
tions to which the production of wealth is only a means, 
but by acquiring and diffusing knowledge, stimulating 
mental powers and elevating the moral sense, may 
greatly increase the abDity to produce wealth. For man 
does not live by bread alone. He is not an engine, in 
which so much fuel gives so much power. On a capstan 
bar or a topsail halyard a good song teUs like muscle, 
and a " Marseillaise " or a " Battle Hjonn of the Repub- 
lic" counts for bayonets. A hearty laugh, a noble 
thought, a perception of harmony, may add to the power 
of dealing even with material things. 

He who by any exertion of mind or body adds to the 
aggregate of enjoyable wealth, increases the sum of 
human knowledge or gives to human life higher eleva- 
tion or greater fullness— he is, in the large meaning of 
the words, a "producer," a "working-man," a "laborer," 
and is honestly earning honest wages. But he who 
without doing aught to make mankind richer, wiser, 
better, happier, lives on the toil of others— he, no matter 
by what name of honor he may be called, or how lustily 
the priests of Mammon may swing their censers before 
him, is in the last analysis but a beggar-man or a thief. 



CHAPTER VIII. 

TAEIPFS FOR REVENUE. 

TARIFFS may embrace duties on exports as well as 
on imports; but duties on exports are prohibited 
by the Constitution of the United States and are now 
levied only by a few countries, such as Brazil, and by 
them only*on a few articles. The tariff, as we have to 
consider it, is a schedule of taxes upon imports. 

The word "tariff" is said to be derived from the 
Spanish town of Tarif a, near Gibraltar, where the Moors 
in the days of their power collected duties, probably 
much after the manner of those Chinese local custom- 
houses called " squeeze stations." But the thing is older 
than the name. Augustus Csesar levied duties on imports 
into Italy, and there were tariffs long before the Caesars. 

The purpose in which tariffs originate is that of raising 
revenue. The idea of using them for protection is an 
afterthought. And before considering the protective 
function of tariffs it will be weU to consider them as a 
means for collecting revenue. 

It is usually assumed, even by the opponents of protec- 
tion, that tariffs should be maintained for revenue. 
Most of those who are commonly called free traders 
might more properly be called revenue-tariff men. They 
object, not to the tariff, but only to its protective fea- 
tures, and propose, not to abolish it, but only to restrict 
it to revenue purposes. Nearly all the opposition to the 

69 



70 PROTECTION OR FREE TRADE? 

protective system in the United States is of this kind, 
and in current discussion a tariff for revenue only is 
usually assumed to be the sole alternative to a tariff for 
protection. But since there are other ways of raising 
revenue than by tariffs this manifestly is not so. And if 
not useful for protection, the only justification for any 
tariff is that it is a good means of raising revenue. Let 
us inquire as to this. 

Duties on imports are indirect taxes. Therefore the 
question whether a tariff is a good means of raising 
revenue involves the question whether indirect taxation 
is a good means of raising revenue. 

As to ease and cheapness of collection indirect taxa- 
tion is certainly not a good means of raising revenue. 
While there are direct taxes, such as taxes on real estate 
and taxes on legacies and successions, from which great 
revenues can easily and cheaply be collected, the only 
indirect taxes from which any considerable revenue can 
be obtained require large and expensive staffs of officials 
and the enforcement of vexatious and injurious regu- 
lations. To collect the indirect tax on tobacco and 
cigars, France and some other countries make the trade 
and manufacture a strict government monopoly, while 
Great Britain prohibits the culture of tobacco under 
penalty of fine and imprisonment— a prohibition particu- 
larly injurious to Ireland, where the soil and climate are 
in some parts admirably adapted to the growth of cer- 
tain kinds of tobacco. In the United States we maintain 
a costly inquisitorial system which assumes to trace 
every pound of tobacco raised or imported, through all 
its stages of manufacture, and requires the most elabo- 
rate returns of private business to be made to govern- 
ment officials. To collect more easily an indirect tax 
upon salt the government of British India cruelly pre- 
vents the making of salt in many places where the 



TARIFFS FOR REVENUE. 71 

natives suffer from the want of it. While indirect taxes 
upon spirituous liquors, wherever resorted to, require the 
most elaborate system of prohibition, inspection and 
espionage. 

So with the collection of indirect taxes upon imports. 
Land frontiers must be guarded and sea-coasts watched ; 
imports must be forbidden except at certain places and 
under regulations which are always vexatious and fre- 
quently entail wasteful delays and expenses; consuls 
must be maintained all over the world, and no end of 
oaths required; vessels must be watched from the time 
they enter harbor until the time they leave, and every- 
thing landed from them examined, down to the trunks 
and satchels and sometimes the persons of passengers, 
while spies, informers and "bloodhounds" must be en- 
couraged. 

But in spite of prohibitions, restrictions, searchings, 
watchings and swearings, indirect taxes on commodities 
are largely evaded, sometimes by the bribery of officials 
and sometimes by the adoption of methods for eluding 
their vigUance, which though costly in themselves, cost 
less than the taxes. All these costs, however, whether 
borne by the government or by the first payers (or 
evaders) of the taxes, together with the increased charges 
due to increased prices, finally fall on consumers, and 
thus this method of taxation is extremely wasteful, 
taking from the people much more than the government 
obtains. 

A still more important objection to indirect taxation 
is that when imposed on articles of general use (and it is 
only from such articles that large revenues can be had) 
it bears with far greater weight on the poor than on the 
rich. Since such taxation falls on people not according 
to what they have, but according to what they consume, 
it is heaviest on those whose consumption is largest in 



73 PROTECTION OR FREE TRADE? 

proportion to their means. As much sugar is needed to 
sweeten a cup of tea for a working-girl as for the richest 
lady in the land, but the proportion of their means which 
a tax on sugar compels each to contribute to the govern- 
ment is in the case of the one much greater than in the 
case of the other. So it is with all taxes that increase 
the cost of articles of general consumption. They bear 
far more heavily on married men than on bachelors ; on 
those who have children than on those who have none ; 
on those barely able to support their famiUes than on 
those whose incomes leave them a large surplus. If the 
millionaire chooses to live closely he need pay no more of 
these indirect taxes than the mechanic. I have known 
at least two millionaires— possessed not of one, but of 
from six to ten millions each— who paid little more of 
such taxes than ordinary day-laborers. 

Even if cheaper articles were taxed at no higher rates 
than the more costly, such taxation would be grossly 
unjust; but in indirect taxation there is always a ten- 
dency to impose heavier taxes on the cheaper articles 
used by all than on the more costly articles used only by 
the rich. This arises from the necessities of the case. 
Not only do the larger amounts of articles of common 
consimiption afford a wider basis for large revenues than 
the smaller amounts of more costly articles, but taxes 
imposed on them cannot be so easily evaded. For 
instance, while articles in use by the poor as well as the 
rich are under our tariff taxed fifty and a hundred, and 
even a hundred and fifty per cent., the tax on diamonds 
is only ten per cent., and this comparatively light tax is 
most difficult to enforce, owing to the high value of 
diamonds as compared with their bulk. Even where dis- 
crimination of this kind is not made in the imposition of 
indirect taxation, it arises in its collection. Specific 
taxes fall more heavily upon the cheaper than the costlier 



TAEIFFS FOR IJEVKNTrE. 

grades of goods, wluib x^ox^ in the case of ad valorem 
taxes, undervaluation and evasion are easier in regard to 
the more valuable grades. 

That indirect taxes thus bear far more heavily on the 
poor than on the rich is undoubtedly one of the reasons 
why they have so readily been adopted. The rich are 
ever the powerful, and under all forms of government 
have most influence in forming public opinion and fram- 
ing laws, while the poor are ever the voiceless. And 
while indirect taxation causes no loss to those who first 
pay it, it is collected in such insidious ways from those 
who finally pay it that they do not realize it. It thus 
affords the best means of getting the largest revenues 
from the body of the people with the least remonstrance 
against the amount collected or the uses to which it is 
put. This is the main reason that has induced govern- 
ments to resort so largely to indirect taxation. A direct 
tax, where its justice and necessity are not clear, pro- 
vokes outcry and opposition which may at times rise to 
successful resistance; but not only do those indirectly 
taxed seldom realize it, but it is extremely difficult for 
them to refuse payment. They are not called on at set 
times to pay definite sums to government agents, but the 
tax becomes indistinguishably blended with the cost of 
the goods they buy. When it reaches those who must 
finally pay it, together with all costs and profits of collec- 
tion, it is not a tax yet to be paid, but a tax whieh has 
already been paid, some time ago, and many removes 
back, and which cannot be separated from other elements 
which go to make up the cost of goods. There is no 
choice save to pay the tax or go without the goods. 

If a tax-gatherer stood at the door of every store, and 
levied a tax of twenty-five per cent, on every article 
bought, there would quickly be outcry; but the very 
people who would fight rather than pay a tax like this 



T* PROTECTION OR FREE TRADE? 

will uncomplainingly pay hiffhe'* *i*xes when they are 
collected by storekeepers in increased prices. And even 
if an indirect tax is consciously realized, it cannot easily 
be opposed. At the beginning of our Revolution the 
indirect tax on tea levied by the British government, 
without the consent of the American colonies, was suc- 
cessfully resisted by preventing the landing of the tea; 
but if the tea had once got into the hands of the dealers, 
with the taxes on it paid, the English government could 
have laughed at the opposition of the patriots. When in 
Ireland, during the height of the Land League agitation, 
I was much struck with the ease and certainty with 
which an unpopular government can collect indirect 
taxes. At the beginning of the century the Irish people, 
without any assistance from America, proved in the 
famous Tithe war that the whole power of the English 
government could not collect direct taxes they had 
resolved not to pay; and the strike against rent, which 
so long as persisted in proved so effective, could readily 
have been made a strike against direct taxation. Had 
the government which was enforcing the claim of the 
landlords depended on direct taxation, its resources could 
thus have been seriously diminished by the same blow 
which crippled the landlords; but during all the time 
of this strike the force used to put down the popular 
movement was being supported by indirect taxation 
on the people who were in passive rebellion. The people 
who struck against rent could not strike against taxes 
paid in buying the commodities they used. Even had 
rebellion been active and general, the British govern- 
ment could have collected the bulk of its revenues from 
indirect taxation, so long as it retained command of the 
principal towns. 

It is no wonder that princes and ministers anxious to 
make their revenues as large as possible should prefer a 



TARIFFS FOR REVENUE. IS 

method that enables them to "pluck the goose mthout 
making it cry," nor is it wonderful that this preference 
should be shared by those who get control of popular 
governments; but the reason which renders indirect 
taxes so agreeable to those who levy taxes is a sufficient 
reason why a people jealous of their liberties should 
insist that taxes levied for revenue only should be direct, 
not indirect. 

It is not merely the ease with which indirect taxes can 
be collected that urges to their adoption. Indirect taxes 
always enlist active private interests in their favor. The 
first rude device for making the collection of taxes easier 
to the governing power is to let them out to farm. 
Under this system, which existed in France up to the 
Revolution, and still exists in such countries as Turkey, 
persons called farmers of the revenue buy the privilege 
of collecting certain taxes and make their profits, fre- 
quently very large, out of the greater amount which 
their vigilance and extortion enable them to collect. 
The system of indirect taxation is essentially of the same 
nature. 

The tendency of the restrictions and regulations neces- 
sary for the collection of indirect taxes is to concentrate 
business and give large capital an advantage. For 
instance, with a board, a knife, a kettle of paste and a 
few dollars' worth of tobacco, a competent cigar-maker 
could set up in business for himself, were it not for the 
revenue regulations. As it is, in the United States, the 
stock of tobacco which he must procure is not only 
increased in value some two or three times by a tax 
upon it; but before the cigar-maker can go to work he 
must buy a manufacturer's license and find bonds in 
the sum of five hundred dollars. Before he can sell the 
cigars he has made, he must furthermore pay a tax on 
them, and even then if he would sell cigars in less quantil- 



76 PEOTECTION OR FEEE TEADEt 

ties than by the box he must buy a second license. The 
effect of all this is to give capital a great advantage, and 
to concentrate in the hands of large manufacturers a 
business in which, if free, workmen could easily set up 
for themselves. 

But even in the absence of such regulations indirect 
taxation tends to concentration. Indirect taxes add to the 
price of goods not only the tax itself but also the profit 
upon the tax. If on goods costing a dollar a manufac- 
turer or merchant has paid fifty cents in taxation, he will 
now expect profit on a dollar and fifty cents instead of 
upon a dollar. As, in the course of trade, these taxed 
goods pass from hand to hand, the amoimt which each 
successive purchaser pays on account of the tax is con- 
stantly augmenting. It is not merely inevitable that 
consumers have to pay considerably more than a dollar 
for every dollar the government receives, but larger 
capital is required by dealers. The need of larger capital 
for dealing in goods that have been enhanced in cost by 
taxation, the restrictions imposed on trade to secure the 
collection of the tax, and the better opportunities which 
those who do business on a large scale have of managing 
the payment or evading the tax, tend to concentrate 
business, and, by checking competition, to pei-mit large 
profits, which must ultimately be paid by consumers. 
Thus the first payers of in<^ect taxes are generally 
not merely indifferent to the tax, but regard it with 
favor. 

That indirect taxation is of the nature of farming the 
revenue to private parties is shown by the fact that those 
who pay such taxes to the government seldom or never 
ask for their reduction or repeal, but on the contrary 
generally oppose such propositions. The manufacturers 
and dealers in tobacco and cigars have never striven to 
secure any reduction in the heavy taxes on those articles, 



TAEIFFS FOR REVENUE. 77 

and the importers who pay directly the immense sums 
collected by our custom-houses have never grumbled at 
the duties, however they may grumble at the manner of 
their collection. When, at the time of the war, the 
national taxation was enormously increased there was no 
opposition to the imposition of indirect taxation from 
those who would thus be called upon to pay large sums 
to the government. On the contrary, the imposition of 
these taxes, by enhancing the value of stock in hand, 
made many fortunes. And since the war the main diffi- 
culty in reducing taxation has been the opposition of the 
very men who pay these taxes to the government. The 
reduction of the war tax on whisky was strongly 
opposed by the whisky ring, composed of great dis- 
tillers. The match-manufacturers fought bitterly the 
abolition of the tax on matches. Whenever it has been 
proposed to reduce or repeal any indirect tax Congress 
has been beset by a persistent lobby urging that, what- 
ever other taxes might be dispensed with, that particular 
tax might be left in full force. In order to provide an 
excuse for keeping up indirect taxes aU sorts of extrava- 
gant expenditures of the national money have been made, 
and hundreds of millions have been voted away to get 
them out of the Treasury.* Despite all this extrava- 
gance, we have a surplus ; yet we go on collecting taxes 
we do not need because of the opposition of interested 
parties to their reduction. This opposition is of the 
same kind and springs from the same motives as that 
which the farmers of the revenue under the old French 
system would have made to the abolition of a tax which 
enabled them to extort two millions of francs from the 



* Just now (1886) the interests concerned in keeping np indirect 
taxation are urging a worse than useless scheme for spending enor- 
mous sums on iron-clad coast defenses. 



78 PEOTECTION OR FREE TRADE! 

French people for one million which they paid to the 
government. 

Now, over and above the great loss to the people which 
indirect taxation thus imposes, the manner in which it 
gives individuals and corporations a direct and selfish 
interest in public affairs tends powerfully to the corrup- 
tion of government. These moneyed interests enter into 
our politics as a potent demoralizing force. What to the 
ordinary citizen is a question of public policy, affecting 
him only as one of some sixty millions of people, is to 
them a question of special pecuniary interest. To this is 
largely due the state of things in which politics has 
become the trade of professional politicians ; in which it 
is seldom that one who has not money to spend can, with 
any prospect of success, present himseK for the suffrages 
of his fellow-citizens; in which Congress is surrounded 
by lobbyists, clamorous for special interests, and ques- 
tions of the utmost general importance are lost sight of 
in the struggle which goes on for the spoils of taxation. 
That under such a system of taxation our government is 
not far more corrupt than it is, is the strongest proof of 
the essential goodness of republican institutions. 

That indirect taxes may sometimes serve purposes 
other than the raising of revenue I do not deny. The 
license taxes exacted from the sellers of liquor may be 
defended on the ground that they diminish the number 
of saloons and lessen a traf&c injurious to public morals. 
And so taxes on tobacco and spirits may be defended on 
the ground that the smoking of tobacco and the drinking 
of spirits are injurious vices, which may be lessened by 
ma k i n g tobacco and spirits more expensive, so that 
(except the rich) those who smoke may be compelled to 
smoke poorer tobacco, and those who drink to drink 
viler liquor. But merely as a means of raising revenue, 
it is clear that indirect taxes are to be condemned, since 



TARIFFS FOR REVENUE. 79 

they cost far more than they yield, bear with the greatest 
weight upon those least able to pay, add to corruptive 
influences, and lessen the control of the people over their 
government. 

All the objections which apply to indirect taxes in 
general apply to import duties. Those protectionists are 
right who declare that protection is the only justification 
for a tariff,* and the advocates of " a tariff for revenue 
only" have no case. If we do not need a tariff for pro- 
tection we need no tariff at aU, and for the purpose of 
raising revenue should resort to some system which wiQ 
not tax the mechanic as heavily as the millionaire, and 
will not call on the man who rears a family to pay on 
that account more than the man who shirks his natural 
obligation, and leaves some woman whom in the scheme 
of nature it was intended that he should support, to take 
care of herself as best she can. 

* " Tariffs for revenue should have no existence. Interferences 
with trade are to be tolerated only as measures of self-protection." 
— H. C. Carey, Past, Present and Future, p. 472. 

" Taxes for the sake of revenue should be imposed directly, because 
such is the only mode in which the contribution of each individual 
can be adjusted in proportion to his means."— Professor E. P. 
Smith, Political Economy, pp. 265-268. 

" Duties for revenue . . . are highly unjust. They inflict all 
the hardship of indirect and unequal taxation without even the 
purpose of benefiting the consumer."— Professor R. E. Thompson, 
Folitical Economy, p. 232. 



CHAPTER IX. 

TARIFFS FOR PROTECTION. 

PROTECTIVE tariffs differ from revenue tariffs in 
their object, which is not so much that of obtaining 
revenue as that of protecting home producers from the 
competition of imported commodities. 

The two objects, revenue and protection, are not 
merely distinct, but antagonistic. The same duty may 
raise some revenue and give some protection, but, past a 
certain point at least, in proportion as one object is 
secured the other is sacrificed, since revenue depends on 
the bringing in of commodities; protection on keeping 
them out. So the same tariff may embrace both protec- 
tive and revenue duties, but while the protective duties 
lessen its power of collecting revenue, the revenue duties 
by adding to the cost of home production lessen its 
power of encouraging home producers. The duties of a 
purely revenue tariff should fall only on commodities not 
produced in the country; or, if levied on commodities 
partly produced at home, should be balanced by equiva- 
lent internal taxes to prevent incidental protection. In 
a purely protective tariff, on the other hand, commodities 
not produced in the country should be free and duties 
should be levied on commodities that are or may be pro- 
duced in the country. And, just in proportion as it 
accomplishes its object, the less revenue will it yield. 
The tariff of Great Britain is an example of a purely 

80 



TARIFFS FOR PROTECTION. 81 

revenue tariff, incidental protection being prevented by 
excise duties. There is no example of a purely protective 
tariff, the purpose of obtaining revenue seeming always to 
be the original stock upon which protective features are 
grafted. The tariff of the United States, like all actual 
protective tariffs, is partly revenue and partly protective, 
its original purpose of yielding revenue having been sub- 
ordinated to that of giving protection, until it may now 
be best described as a protective tariff yielding incidental 
revenue. 

As we have already considered the revenue functions 
of tariffs, let us now consider their protective functions. 

Protection, as the word has come to be used to denote 
a scheme of national policy, signifies the levying of 
duties on the importation of commodities (as a means) in 
order (as an end) to encourage domestic industry. 

Now, when the means proposed in any such scheme is 
the only means by which the proposed end can be 
reached, it is only needful to inquire as to the desira- 
bility of the end ; but when the proposed means is only 
one of various means we must satisfy ourselves that it is 
the best. If it is not, the scheme is condemned irrespec- 
tive of the goodness of its end. Thus the advisability of 
protection does not, as is generally assumed, follow the 
admission of the advisability of encouraging domestic 
industry. That granted, the advisability of protection is 
still an open question, since it is clear that there are 
other ways of encouraging home industry than by 
import duties. 

Instead of levying import duties, we might, for 
instance, destroy a certain proportion of imported com- 
modities, or require the ships bringing them to sail so 
many times round the world before landing at our ports. 
In either of these ways precisely the same protective 
effect could be secured as by import duties, and in cases 



82 PROTECTION OR FREE TRADE? 

where duties secure full protection by preventing impor- 
tation, such methods would involve no more waste. Or, 
instead of indirectly encouraging domestic producers by 
levying duties on foreign goods, we might directly 
encourage them by paying them bounties. 

As a means of encouraging domestic industry the 
bounty has over the protective system all the advantages 
that the system of paying public officers fixed salaries 
has over the system prevailing in some countries, and in 
some instances in our own, of letting them make what 
they can. As by paying fixed salaries we can get offi- 
cials at such places and to perform such functions as we 
wish, while under the make-what-you-can system they 
can only be got at places and in capacities that will 
enable them to pay themselves, so do bounties permit 
the encouragement of any industry, while protection 
permits only the encouragement of the comparatively 
few industries with which imported commodities com- 
pete. As salaries enable us to know what we are 
paying, to proportion the rewards of different offices to 
their respective dignity, responsibility and arduousness, 
while make-what-you-can may give to one official much 
more than is necessj^iry, and to others not enough, so do 
bounties enable us to see and to fix the encouragement 
to each industry, while the protective system leaves the 
public in the dark and makes the encouragement to each 
industry almost a matter of chance. And as salaries 
impose on the people much lighter and more fairly 
apportioned burdens than does the make-what-you-can 
system, so is the difference between bounties and pro- 
tection. 

To illustrate the working of the two systems, let it be 
assumed desirable to encourage aerial navigation at 
public expense. Under the bounty system we should 
offer premiums for the building and successful operation 



TARIFFS FOR PROTECTION. 83 

of air-ships. Under the protective system we should 
impose deterrent taxes on all existing methods of trans- 
portation. In the one case we should have nothing to 
pay till we got what we wanted, and would then pay a 
definite sum which would fall on individuals and localities 
in general taxes. But in the other case we should have to 
suffer all the inconveniences of obstructed transportation 
before we got air-ships, and whether we got them or not ; 
and while these obstructions would, in some cases, more 
seriously affect individuals, businesses and localities than 
in others, we should never be able to tell how much they 
distorted industry and cost the people, or how much they 
stimulated the invention and building of air-ships. In 
the one case, moreover, after aerial navigation had 
proved successful, and the stipulated bounties had been 
paid, the air-ship men would hardly have the audacity to 
ask for more bounties, and would not be likely to get 
them if they did. In the other case, the public would 
have grown accustomed to the taxes on surface transpor- 
tation, while the air-ship proprietors, if they had not 
convinced themselves that these taxes were necessary to 
the continued prosperity of aerial navigation, could 
readily pretend so, and would have, in opposing their 
repeal, the advantage of that inertia which tends to the 
continuance of anything that is. 

The superiority of the bounty system over the protec- 
tive system for the encouragement of any single industry 
is very great ; but it becomes greater as the number of 
industries to be encouraged is increased. When we 
encourage an industry by a bounty we do not discourage 
any other industry, except as the necessary increase in 
general taxation may have a discouraging effect. But 
when to encourage one industry we raise the price of its 
products by a protective duty, we at the same time pro- 
duce a directly injurious effect upon other industries that 



84 PROTECTION OR FREE TRADE! 

use those products. So complicated has production 
become, so intimate are the relations between industries, 
and in so many forms do the products of one industry 
enter into the materials or processes of others, that what 
will be the effect of a single protective duty it is hard for 
an expert to say. But when it comes to encouraging not 
one nor a dozen, but a thousand different industries, it 
is impossible for human intelligence to trace the multi- 
farious effects of raising the prices of so many products. 
The people cannot tell what such a system costs them, 
nor in most cases can even those who are supposed to be 
its beneficiaries really tell how their gains under it com- 
pare with their losses from it. 

The "drawback" system is an attempt to prevent, so 
far as exports are concerned, the discouragement to 
which the protection of one industry subjects others. 
Drawbacks are bounties paid on exports of domestic 
goods to an amount which it is calculated will compen- 
sate for the addition a duty on material has made to 
their cost. But drawbacks not only leave home prices 
undiminished, but while fruitful of fraud, can only in 
small part prevent the discouragement of exports, since 
it is only on goods into which dutiable commodities have 
entered in large proportion and obvious ways that draw- 
backs are allowed, or that it is worth the while of the 
exporter to attempt to collect them. In 1884, for 
instance, the United States paid out a larger sum in 
drawbacks on copper than was received in duties on 
copper, yet it is certain that very many exports into 
which copper entered, and which were therefore 
enhanced in cost by the duty, got no drawback what- 
ever. And so of drawbacks on refined sugar, for which 
we are paying a sum greatly in excess of the duties col- 
lected on the raw sugar, though many of our exports, 
such as those of condensed milk, syrups and preserved 
fruits, are much curtailed by these duties. 



TARHTS FOR PROTECTION. 96 

The substitution of bounties for protection in encour- 
aging industry would do away with the necessity for 
such inefficient, fraud-provoking and back-action devices. 
Under the bounty system prices would not be raised, 
except as affected by general taxation. Each encouraged 
producer would know in dollars and cents how much 
encouragement he got, and the people at large would 
know how much they paid. In short, all and even more 
than protection can do to encourage home industries can 
be done more cheaply and more certainly by bounties. 

It is sometimes asserted, as one of the advantages of 
tariff duties, that they faU on the producers of imported 
goods, and are thus paid by foreigners. This assertion 
contains a scintilla of truth. An import duty on a com- 
modity of which the production is a closely controlled 
foreign monopoly may in some cases fall in part or in 
whole upon the foreign producer. For instance, let us 
say that a foreign house or combination has a monopoly 
in the production of a certain article. Within the limits 
of cost on the one hand and the highest rate at which 
any can be sold on the other, the price of such article 
can be fixed by the producers, who wiU naturally fix it at 
the point they conclude will give the largest aggregate 
profits. If we impose an import duty on such an article 
they may prefer to reduce their profit on what they sell 
to this country rather than have the sale diminished by 
the addition of the duty to the price. In such case the 
duty wiU fall upon them. 

Or, again, let us suppose a Canadian farmer so situated 
that the only market in which he can conveniently sell 
his wheat is on the American side. "Wheat being a 
commodity of which our home production not merely 
supplies home demands, but leaves a surplus for export, 
the duty on wheat does not add to price, and the Cana- 
dian farmer so exceptionally situated that he must send 
wheat to this side, although there is no general demand 



86 PROTECTION OR FREE TRADE! 

for Canadian wheat, cannot get back in enhanced price 
the duty he must pay. 

The two classes represented by these instances suggest 
all the cases in which import duties fall on foreign pro- 
ducers.* Such cases, too unimportant to be considered 
in any estimates of national revenue, are only the rare 
exceptions to the general rule that the ability to tax ends 
with the territorial limits of the taxing power. And it is 
well for mankind that this is so. M it were possible for 
the government of one country, by any system of taxa- 

* In certain cases where an import duty, levied in one country 
on the produce of another, has the effect of reducing price in the 
expori;ing country at the expense of rent, it may, in some part, fall 
upon foreign landowners. John Stuart Mill ("Political Economy," 
Book v., Chapter III.,) further maintains that taxes on imports fall 
in part, not on the foreign producer of whom we buy, but on the 
foreign consumer to whom we sell— since they increase the cost of 
products we export. But this is only to say that the injury which 
we do ourselves by protection must in some part fall upon those with 
whom we trade. And even if import duties do, in such ways, some- 
what increase the cost to foreigners of what they get from us, and 
thus, in some degree, compel them to share our loss, yet they also 
handicap us when we come into competition with them. Thus, 
assuming that our tariff upon imports may at times, to some slight 
extent, have increased the price which English consumers have had 
to pay for our cotton, wheat or oil, the increased cost of production 
in the United States has certainly operated far more strongly to give 
English producers an advantage over American producers in markets 
in which they compete, and to enable England to take the lion's 
share of the ocean-borne commerce of the world. 

The minute tracing of the actions and reactions of taxation upon 
international trade is, however, more a matter of theoretical nicety 
than of practical interest, since the general conclusion will be that 
stated in the text, that while we cannot injure ourselves without 
injuring others, the taxing power of a government is substantially 
restricted to its territorial limit. The clearest exception to this is 
in the case of export duties on articles of which the country levying 
the export duty has a monopoly, as Brazil has of india-rubber and 
Cuba of the Havana tobacco. 



TAEIFFS FOR PROTECTION. 87 

tion, to compel the people of other countries to pay its 
expenses, the world would soon be taxed into barbarism. 

But the possibility of exceptional cases in which import 
duties may in part or in whole fall on foreign producers, 
instead of domestic consumers, has in it, even for those 
who would gladly tax "foreigners," no shadow of a 
recommendation for protection. For it wiU be noticed 
that the cases in which an import duty falls on foreign 
producers, are cases in which it can afford no encourage- 
ment to home producers. An import duty can only fall 
on foreign producers when its payment does not add to 
price ; while the only possible way in which an import 
duty can encourage home producers is by adding to price. 

It is sometimes said that protection does not increase 
prices. It is sufficient answer to ask, how then can it 
encourage? To say that a protective duty encourages 
the home producer without raising prices, is to say that 
it encourages him without doing anything for him. 
Wherever beneath this assertion, as regardless of fact as 
it is of theory, there is any glimmering of reason, it is 
either in the notion that protective duties do not per- 
manently add to prices, because they bring about such a 
competition between home producers as finaUy carries prices 
down to the previous level ; or else in a confused idea that 
it would be an advantage to home producers to be secured 
the whole home market, even if at no higher prices. 

But as to the first, the only way in which a protective 
duty can increase home competition in the production of 
any commodity is by so increasing prices as to attract 
producers. to the industry by the superior profits to be 
obtained. This competition, when free to operate, ulti- 
mately reduces profits to the general level.* But this is 



* The effect of protection upon profits in the protected Industries 
will be more fully examined in Chapter XVII. 



88 PROTECTION OR FREE TRADE! 

not to say that it reduces prices to what they would be 
without the duty. The profits of Louisiana sugar-gi*ow- 
ing are now, doubtless, no larger than in other occupa- 
tions involving equal risks, but the duty on sugar does 
make the price of sugar very much higher in the United 
States than it is in England, where there is no dut}'^ upon 
it. And even where there is no reason In natural or 
social conditions why a commodity should not be pro- 
duced as cheaply as in any foreign country, the effect of 
the network of duties, of which the particular duty is 
but a part, is to increase the cost of production, and thus, 
though profits may fall, to keep prices above the point of 
free importation. Did the price of a protected article 
fall to the point at which the foreign product could not 
be imported were there no duty, the duty would cease to 
protect, since the foreign product would not be isnported 
if it were abolished, and the producers for whose protec- 
tion it was imposed would cease to care for its retention. 
In what instance has this been the case? Are any of 
our protected industries less clamorous for protection 
now than they were forty years ago? 

As to the second notion, it is to be observed that the 
only way in which a protective duty can give the home 
market to home producers is by increasing the price at 
which foreign products can be sold in it. Not merely 
does this increase in the price of foreign products compel 
an increase in the price of domestic products into which 
they enter, but the shutting out of foreign products nniM 
increase the price of similar domestic products. For it 
is only where prices are fixed by the will of the producer 
that increase or decrease in supply does not result in 
increase or decrease of price. Thus, while the newspaper 
business is not a monopoly, the publication of each indi- 
vidual paper is, and its price is fixed by the publisher. A 
publisher may, and in most cases will, prefer increased cir- 



TARIFFS FOR PROTECTION. 89 

culation to increased prices. And if competition were to 
be lessened, or even cut off, as, for instance, by imposing 
a stamp duty on, or prohibiting the publication of all the 
newspapers of New York save one, it would not neces- 
sarily follow that the price of that paper would be 
increased. But the prices of the great mass of com- 
modities, and especially the great mass of commodities 
which are exported and imported, are regulated by com- 
petition. They are not fixed by the will of producers, 
but by the relative intensity of supply and demand, 
which are brought to an equation in price by what Adam 
Smith called "the higgling of the market," and hence 
any lessening of supply caused by the shutting out of 
importations will at once increase prices. 

In short, the protective system is simply a system of 
encouraging certain industries by enabling those carry- 
ing them on to obtain higher prices for the goods they 
produce. It is a clumsy and extravagant mode of giving 
encouragement that could be given much better and at 
much less cost by bounties or subsidies. If it be wise to 
" encourage " American industries, and this we have yet 
to examine, the best way of doing so would be to abolish 
our tariff entirely and to pay bounties from funds 
obtained by direct taxation. In this way the cost could 
be distributed with some approach to fairness, and the 
citizen who is worth a miQion times more than another 
could have the satisfaction of contributing a million 
times as much to the encouragement of American 
industry. 

I do not forget that, from the bounties given in the 
colonial days for the killing of noxious animals to the 
subsidies granted to the Pacific railroads, experience has 
shown that the bounty system inevitably leads to fraud 
and begets corruption, while but poorly accomplishing the 
ends sought by it. But these evils are inseparable from 



00 PROTECTION OR FREE TRADE! 

any method of " encouragement," and attach to the pro- 
tective more than to the bounty system, because its 
operations are not so clear. If protection has been pre- 
ferred to bounties it is not that it is a better means of 
encouragement, but for the same reason that indirect 
has been preferred to direct taxation— because the people 
do not so readily realize what is being done. Where a 
grant of a hundred thousand dollars directly from the 
treasury would raise an outcry, the imposition of a duty 
which will enable the appropriation of millions in higher 
prices excites no comment. Where bounties have been 
given by our States for the establishment of new indus- 
tries they have been comparatively small sums, given in 
a single payment or in a subsidy for a definite term of 
years. Although the people have in some cases been 
willing thus to pay bounties to a small extent and for a 
short time, in no case have they consented to regard 
them as a settled thing, and to keep on paying them year 
after year. But protective duties once imposed, the 
protected industry has always been as clamorous for the 
continuance of protection as it was in the beginning for 
the grant of it. And the people not being so conscious 
of the payment have permitted it to go on. 

It is often said by protectionists that free trade is 
right in theory but wrong in practice. Whatever may 
be meant by such phrases they involve a contradiction 
in terms, since a theory that wiU not agree with facts 
must be false. But without inquiring into the validity 
of the protective theory it is clear that no such tariff as 
it proposes ever has been or ever can be made. 

The theory of free trade may be carried into practice 
to the point of ideal perfection. For to secure free trade 
we have only to abolish restrictions. But to carry the 
theory of protection into practice some articles must be 
taxed and others left untaxed, and, as to the articles 



TARIFFS FOR PROTECTION. 91 

taxed, different rates of duty must be imposed. And as 
the protection given to any industry may be neutralized 
by protection that enhances the price of its materials, 
careful discrimination is required, for there are very few 
articles that can be deemed finished products in relation 
to all their uses. The finished products of some indus- 
tries are the materials or tools of other industries. Thus, 
while the protection of any industry is useless unless 
sufficient to produce the desired effect, too much protec- 
tion is likely, even from a protective standpoint, to do 
harm. 

It is not merely that the ideal perfection with which 
the free-trade theory may be reduced to practice is 
impossible in the case of protection, but that even a 
rough approximation to the protective theory is impos- 
sible. There never has been a protective tariff that satis- 
fied protectionists, and there never can be. Our present 
tariff, for instance, is admitted by protectionists to be 
full of the grossest blunders.* It was adopted only 

• For instance, to cite only one case, the last Tariff Act, which 
■went into effect in July, 1883, raised the duty on the fabric used in 
the manufacture of ruching and rufliings from 35 to 125 per cent., 
while leaving the duty of the finished article at 35 per cent. Pre- 
vious to this, say the manufacturers of these goods, in a memorial 
address to the Secretary of the Treasury, they not only supplied the 
American market, but sold hundreds of thousands of dollars' worth 
every year to Canada, the West Indies and other countries, the 
labor-saving machinery which they had in use giving them an advan- 
tage which, in spite of the 35-per-cent. tax on their material, enabled 
them to compete successfully with European factories. But the 
125-per-cent. duty has not only cut off this export trade completely, 
but has led to such an importation of British goods that, as the 
memorial declares, thousands of hands have lost their employment, 
and three-fourths of the manufacturers engaged in the business have 
been utterly ruined. This, of course, was not intended by Congress. 
The rufling industry is only one of the many minor indostries that 
were thrown down and trampled upon in the last tariff scramble. 



92 PEOTECTION OR FREE TR^Ef 

because, after a long wrangle, it was found impossible to 
agree upon a better one, and it is maintained and de- 
fended only because any attempt to amend it would begin 
a scramble out of which no one can teU what sort of a 
tariff would come. This has been the case with every 
former tariff, and must be the case with every future tariff. 

To make a protective tariff that would even roughly 
accord with the protective theory would require in the 
first place a minute knowledge of all trade and industry, 
and of the manner in which an effect produced on one 
industry would act and react on others. This no king, 
congress or parliament ever can have. But, further 
than this, absolute disinterestedness is required, for the 
fixing of protective duties is simply the distribution of 
pecuniaiy favors among a crowd of greedy applicants. 
And even were it possible to obtain for the making of a 
protective tariff a body of men themselves disinterested 
and incapable of yielding to bribery, to threats, to friend- 
ship or to flattery, they would have to be more than 
human not to be dazed by the clamor and misled by the 
representations of selfish interests. 

The making of a tariff, instead of being, as the protec- 
tive theory requires, a careful consideration of the cir- 
cumstances and needs of each industry, is in practice 
simply a great "grab" in which the retaiued advocates 
of selfish interests bully and beg, bribe and logroll, in 
the endeavor to get the largest possible protection for 
themselves without regard for other interests or for the 
general good. The result is, and always must be, the 
enactment of a tariff which resembles the theoretical 
protectionist's idea of what a protective tariff should be 
about as closely as a bucketful of paint thrown against 
a wall resembles the fresco of a Raphael. 

But this is not all. After a tariff has been enacted, 
come the interpretations and decisions of treasury ofiBi- 



TAEIFFS FOR PROTECTION. 93 

cials and courts to unmake and remake it,* and duties 
are raised or lowered by a printer's placing of a comma 
or by arbitrary constructions, frequently open to grave 
suspicion, and which no one can foresee, so that, as 
Horace Greeley naively says ("Political Economy," p. 
183): 

The longer a tariff continues the more weak spots are found, the 
more holes are picked in it, until at last, through the influence of 
successive evasions, constructions, decisions, its very father could 
not discern its original features in the transformed bantling that 
has quietly taken its place. 

Under the bounty system, bad as it is, we can come 
much nearer to doing what we want to, and to knowing 
what we have done. 

* The Secretary of the Treasury states that there are now (Feb- 
ruary, 1886) over 2300 tariff cases pending in the Southern District 
of New York alone. 



CHAPTER X. 

THE ENCOURAGEMENT OP INDUSTRY. 

WITHOUT questioning the end sought by them we 
have seen that protective tariffs are to be con- 
demned as a means. Let us now consider their end — 
the encouragement of home industry. 

There can be no difference of opinion as to what 
encouragement means. To encourage an industry in the 
protective sense is to secure to those carrying it on 
larger profits than they could of themselves obtain. 
Only so far and so long as it does this can any protection 
encourage an industry. 

But when we ask what the industries are that protec- 
tion proposes to encourage we find a wide difference. 
Those whom American protectionists have regai'ded as 
their ablest advocates have asked protection for the 
encouragement of "infant industries " — describing the 
protective system as a means for establishing new indus- 
tries in countries to which they are adapted.* They 

* " Whoever will consult Alexander Hamilton's Report on Manu- 
factures, the writings of Matthew Carey, Hezekiah Niles and their 
compeers, with the speeches of Henry Clay, Thomas Newton, James 
Tod, Walter Forward, RoUin C. Mallary, and other forensic cham- 
pions of protection, with the messages of our earlier Presidents, of 
Governors Simon Snyder, George Clinton, Daniel D. Tompkins, De 
Witt Clinton, etc., cannot fail to note that they champion not the 
maintenance, but the creation of home manufactures."— Horace 
Greelet, Political Economy, rt. 3^ 



THE ENCOURAGEMENT OF INDUSTRY. 95 

have scouted the idea of attempting to encourage all 
industry, and declared the encouragement of industries 
not adapted to a country, or already established, or for a 
time longer than necessary for their establishment, to 
be waste and robbery. As it is now popularly advocated 
and practically applied in the United States the aim of 
protection, however, is not the encouragement of " infant 
industries" but the encouragement of "home industry" 
—that is to say, of all home industries. And what has 
proved true in our case is generally true. Wherever 
protection is once begun, the imposition of duties never 
stops until every home industry of any political strength 
that can be protected by tariff gets some encouragement. 
It is only in new. countries and in the beginnings of the 
system that the encouragement of infant industries can 
be presented as the sole end of protection, European 
protectionists can hardly ask protection, on the ground 
of their infancy, for industries that have been carried on 
since the time of the Romans. And in the United States 
to ask now the encouragement of such giants as our iron, 
steel and textUe industries as a means for their establish- 
ment would, after all these years of high tariffs, be mani- 
festly absurd. 

We have thus two distinct propositions to examine— 
the proposition that new and desirable industries should 
be encouraged, which still figures in the apologetics of 
protection, and the proposition popularly urged and 
which our protectionist legislation attempts to carry into 
effect— that home industry should be encouraged. 

As an abstract proposition it is not, I think, to be 
denied that there may be industries to which temporary 
encouragement might profitably be extended. Industries 
capable, in their development, of much public benefit 
have often to struggle under great disadvantages in their 
beginnings, and their development might sometimes be 



96 PROTECTION OR FREE TRADE? 

beneficially hastened by judicious encouragement. But 
there are insuperable difficulties in the way of discover- 
ing what industries would repay encouragement. There 
are, doubtless, in every considerable community some 
men of exceptional powers who, if provided at public 
expense with an assured living and left free to investi- 
gate, to invent or to think, would make to the public 
most valuable returns. But it is certain that, under any 
system yet devised, such livings, if instituted, would not 
be filled by men of this kind ; but by the pushing and 
infiuential, by flatterers and dependents of those in 
power or by respectable nonentities. The very men who 
would give a good return in such places would, by virtue 
of their qualities, be the last to get them. 

So it is with the encouragement of struggling indus- 
tries. All experience shows that the policy of encourage- 
ment, once begun, leads to a scramble in which it is the 
strong, not the weak ; the unscrupulous, not the deserv- 
ing, that succeed. What are really infant industries 
have no more chance in the struggle for governmental 
encouragement than infant pigs have with full-grown 
swine about a meal-tub. Not merely is the encourage- 
ment likely to go to industries that do not need it, but it 
is likely to go to industries that can be maintained only 
in this way, and thus to cause absolute loss to the com- 
munity by diverting labor and capital from remunerative 
industries. On the whole, the ability of any industry to 
establish and sustain itself in a free field is the measure 
of its public utility j^ and that "struggle for existence" 
which drives out unprofitable industries is the best means 
of determining what industries are needed under existing 
conditions and what are not. Even promising industries 
are more apt to be demoralized and stunted than to be 
aided in healthy growth by encouragement that gives 
them what they do not earn, just as a young man is 



THE ENCOURAGEMENT OP INDUSTRY. 97 

more likely to be injured than benefited by being left a 
fortune. The very difficulties with which new industries 
must contend not merely serve to determine which are 
really needed, but also serve to adapt them to surround- 
ing conditions and to develop improvements and inven- 
tions that under more prosperous circumstances would 
never be sought for. 

Thus, while it may be abstractly true that there are 
industries that it would be wise to encourage, the only 
safe course is to give to all " a fair field and no favor." 
Where there is a conscious need for the making of some 
invention or for the establishment of some industry 
which, though of public utility, would not be commer- 
cially profitable, the best way to encourage it is to offer 
a bounty conditional upon success. 

Nothing could better show the futility of attempting 
to make industries self-supporting by tariff than the 
confessed inability of the industries that we have so long 
encouraged to stand alone. In the early days of the 
American Republic, when the friends of protection were 
trying to ingraft it upon the Federal revenue system, 
protection was asked, not for the maintenance of Ameri- 
can industry, but for the establishment of " infant indus- 
tries," which, it was asserted, would, if encouraged for a 
few years, be able to take care of themselves. The 
infant boys and girls of that time have grown to matu- 
rity, become old men and women, and with rare excep- 
tions have passed away. The nation then fringing the 
Atlantic seaboard has extended across the continent, and 
instead of four million now numbers nearly sixty million 
people. But the "infant industries," for which a little 
temporary protection was then timidly asked, are still 
infants in their desire for encouragement. Though they 
have grown mightily they claim the benefits of the 
" Baby Act " all the more lustily, declaring that if they 



98 PROTECTION OR FREE TRADEf 

cannot have far higher protection than at the beginning 
they dreamed of asking they must perish outright. 

When United States Senator Broderick, shot by Chief- 
Justice Terry in a duel, died without making a will, a 
Dublin man wrote to the editor of a San Francisco news- 
paper claiming to be next of kin. He gave the date of 
his birth, which showed him forty-seven years of age, 
and wound up by adjuring the editor to help a poor 
orphan, who had lost both father and mother. The 
"infant pidustry" argument nowadays always reminds 
me of that orphan. 

Protectionist writers have not yet given up the " infant 
industry " plea, for it is the only ground on which with 
any semblance of reason protection can be asked ; but in 
the face of the facts they have extended the time in 
which it is averred that protection can establish an 
infant industry. The American people used to be told 
that moderate duties for r, few years would enable the 
protected industries to stand clone and defy foreign 
competition. But in the latcct edition cf his "Political 
Economy " (p. 233), Professor Thompson of the University 
of Pennsylvania tells us that " it wiU ordinarily take the 
lifetime of two generations to rxiclimatize thoroughly a 
new manufacture, and to bring the native production up 
to the native demand." 

When we are told that two generations should tax 
themselves to establish an industry for the third, well 
may we ask, "What has posterity ever done for us?" 
Yet even this promise is not borne out by facts. Indus- 
tries that we have been protecting for more than two 
generations now need, according to protectionists, more 
protection than ever. 

The popular plea for protection in the United States 
to-day is not, however, the encouragement of infant 
industries, but the encouragement of home industry, that 
is, all home industry. 



THE ENCOURAGEMENT OF INDUSTEY. 99 

Now it is manifestly impossible for a protective tariff 
to encourage all home industry. Duties upon commod- 
ities entirely produced at home can, of course, have no 
effect in encouraging any home industry. It is only 
when imposed upon commodities partly imported and 
partly produced at home, or entirely imported, yet 
capable of being produced at home, that duties can in 
any way encourage an industry. No tariff which the 
United States imposed could, for instance, encourage the 
growth of grain or cotton, the raising of cattle, the pro- 
duction of coal-oil or the mining of gold or silver; for 
instead of importing these things we not only supply 
ourselves, but have a surplus which we export. Nor 
could any import duty encourage any of the many indus- 
tries which must be carried on where needed, such as 
building, horseshoeing, the printing of newspapers, and 
so on. Since these industries that cannot be protected 
constitute by far the larger part of the industries of 
every country, the utmost that by a protective tariff can 
be attempted is the encouragement of only a few of the 
total industries of a country. 

Yet in spite of this obvious fact, protection is never 
urged for the encouragement of the industries that alone 
can profit by a tariff. That would be to admit that to 
some it gave special advantages over others, and so in 
the popular pleas that are made for it protection is urged 
for the encouragement of all industry. If we ask how 
this can be, we are told that the tariff encourages the 
protected industries, and then the protected industries 
encourage the unprotected industries; that protection 
builds up the factory and iron-furnace, and the factory 
and iron-furnace create a demand for the farmer's pro- 
ductions. 

Imagine a village of say a hundred voters. Imagine 
two of these villagers to make such a proposition as this : 
"We are desirous, fellow-citizens, of seeing you more 



100 PROTECTION OR FREE TRADE? 

prosperous and to that end propose this plan : Give us 
the privilege of collecting a tax of five cents a day from 
every one in the village. No one will feel the tax much, 
for even to a man with a wife and eight children it wiU 
come only to the paltry sum of fifty cents a day. Yet 
this slight tax wiU give our village two rich citizens who 
can afford to spend money. We will at once begin to 
live in commensurate style. We will enlarge our houses 
and improve our grounds, set up carriages, hire servants, 
give parties and buy much more freely at the stores. 
This wiU make trade brisk and cause a greater demand 
for labor. This, in turn, wiU create a greater demand 
for agricultural productions, which will enable the neigh- 
boring farmers to make a greater demand for store 
goods and the labor of mechanics. Thus shall we all 
become prosperous." 

There is in no country under the sun a village in 
which the people would listen to such a proposition. 
Yet it is every whit as plausible as the doctrine that 
encouraging some industries encourages all industries. 

The only way in which we could even attempt to 
encourage all industry would be by the bounty or sub- 
sidy system. Were we to substitute bounties for duties 
as a means of encouraging industry it would not only 
become possible for us to encourage other industries 
than those now encouraged by tariff, but we should be 
forced to do so, for it is not in human nature that the 
farmers, the stock-raisers, the builders, the newspaper 
publishers and so on, would consent to the payment of 
bounties to other industries without demanding them 
for their own. Nor could we consistently stop until 
every species of industry, to that of the boot-black or rag- 
picker, was subsidized. Yet evidently the result of such 
encouragement of each would be the discouragement of 
alL For as there could be distributed only what was 



THE ENCOURAGEMENT OP INDUSTRY. 101 

raised by taxation, less the cost of collection, no one 
could get back in subsidies, were there any fairness in 
their distribution, as much as he would be called upon to 
pay in taxes. 

This practical reduction to absurdity is not possible 
under the protective system, because only a small part of 
the industries of a country can thus be "encouraged," 
while the cost of the encouragement is concealed in 
prices and is not realized by the masses. The tax- 
gatherer does not demand from each citizen a contribution 
to the encouragement of the favored few. He sits down 
in a custom-house and by taxing imports enables the 
favored producer to collect "encouragement" from his 
fellow-citizens in higher prices. Yet it is as true of 
encouragement by tariff as of encouragement by bounty 
that the gain to some involves loss to others, and since 
encouragement by tariff involves far more cost and 
waste than encouragement by bounty, the proportion 
which the loss bears to the gain must be greater. How- 
ever protection may affect special forms of industry it 
must necessarily diminish the total return to industry — 
first, by the waste inseparable from encouragement by 
tariff, and, second, by the loss due to the transfer of 
capital and labor from occupations which they would 
choose for themselves to less profitable occupations 
which they must be bribed to engage in. If we do not 
see this without reflection, it is because our attention is 
engaged with but a part of the effects of protection. We 
see the large smelting-works and the massive mill with- 
out realizing that the same taxes which we are told have 
built them up have made more costly every nail driven 
and every needleful of thread used throughout the whole 
country. Our imaginations are affected as were those 
of the first Europeans who visited India, and who, 
impressed by the profusion and magnificence of the 



102 PROTECTION OR FREE TRADE? 

Bajahs, but not noticing the abject poverty of the 
masses, mistook for the richest country in tiie worid 
what is really the poorest. 

But reflection will show that the claim popularly made 
for protection, that it encourages home industry (i.e., all 
home industry), can be true only in one sense— the sense 
in which Pharaoh encouraged Hebrew industry when he 
compelled the making of bricks without straw. Protec- 
tive tariffs make more work, in the sense in which the 
spilling of grease over her kitchen floor makes more 
work for the housewife, or as a rain that wets his hay 
makes more work for the farmer. 



CHAPTER XT. 

THE HOME MARKET AND HOME TRADE. 

MM 7'^ should Iceep our otcn marJc^ffor our oum producerSy 
WW seems by many to be regarded as the same kind 
of a proposition as, We should Iceep our ovm pasture for 
our mvti cows, whereas, in truth, it is such a proposition 
as, We should keep our oum appetites for our ovm coolcery, 
or. We should keep our oum transportation for our mvn legs. 

What is this home market from which protectionists 
tell us we should so carefully exclude foreign produce? 
Is it not the home demand— the demand for the satisfac- 
tion of our own wants? Hence the proposition that we 
should keep our home market for home producers is 
simply the proposition that we should keep our own 
wants for our own powers of satisfying them. In short, 
to reduce it to the individual, it is that we ought not to 
eat a meal cooked by another, since that would deprive 
us of the pleasure of cooking a meal for ourselves, or 
make any use of horses or railways because that would 
deprive our legs of emplojTnent. 

A short time ago English protectionists (for protection 
is far from dead in England) were censui'ing the govern- 
ment for having given large orders for powder to 
German instead of to English producers. It turned 
out that the Germans were making a new powder called 

103 



I 



104 PEOTECTION OR FREE TRADE? 

"cocoa," which in heavy guns gives great velocity with 
low pressure, and with which all the Continental powers 
had at once provided themselves. Had the English 
government refused to buy from foreign producers, 
English ships, in the event of war, which then seemed 
imminent, would have been placed at a serious disad- 
vantage. 

Now, just as the policy of reserving home markets for 
home producers would in war put a country which 
should adhere to it at a great disadvantage— even to the 
extent, if fully carried out, of restricting the country 
that does not produce coal to the use of sailing-ships, 
and compelling the country that yields no iron to fight 
with bows and arrows— so in aU the vocations of peace 
does this policy involve like disadvantages. Strictly to 
reserve our home market for home producers would be 
to exclude ourselves from participation in the advantages 
which natural conditions or the peculiar skill of their 
people give to other countries. If bananas will not grow 
at home we must not eat bananas. If india-rubber is 
not a home production we must not avail ourselves of its 
thousand uses. If salt can be obtained in our country 
only by evaporating sea-water we must continue so 
to obtain our salt, although in other countries nature 
has performed this work and provided already crystal- 
lized salt in quantities sufficient not only for their people, 
but for us too. Because we cannot grow the cinchona- 
tree we must shake with ague and die from malarial 
diseases, or must writhe in agony under the oculist's 
knife because the beneficent drug that gives local insen- 
sibility is not a home production. And so with all those 
products in which the peculiar development of industry 
has enabled the people of various countries to excel. To 
reserve our home market to home production is to limit 
the world from which our wants may be supplied to the 



THE HOME MARKET AND HOME TRADE. 105 

bounds of our own country, how little, soever that may 
be. And to place any restrictions upon importations is, 
in so far as they operate, to deprive ourselves of oppor- 
tunities to satisfy our wants. 

It may be to the interest of a shopkeeper that the 
people of his neighborhood should be prohibited from 
buying from any one but him, so that they must take 
such goods as he chooses to keep, at such prices as he 
chooses to charge, but who would contend that this was 
to the general advantage ? It might be to the interest of 
gas-companies to restrict the number and size of win- 
dows, but hardly to the interest of a community. Broken 
limbs bring fees to surgeons, but would it profit a 
municipality to prohibit the removal of ice from side- 
walks in order to encourage surgery ? Yet it is in such 
ways that protective tariffs act. Economically, what 
difference is there between restricting the importation of 
iron to benefit iron-producers and restricting sanitary 
improvements to benefit undertakers ? 

To attempt to make a nation prosperous by preventing 
it from buying from other nations is as absurd as it 
would be to attempt to make a man prosperous by pre- 
venting him from buying from other men. How this 
operates in the case of the individual we can see from 
that practice which, since its application in the Irish land 
agitation, has come to be called "boycotting." Captain 
Boycott, upon whom has been thrust the unenviable 
fame of having his name turned into a verb, was in fact 
"protected." He had a protective tariff of the most 
efficient kind built around him by a neighborhood decree 
more effective than act of Parliament. No one would 
sell him labor, no one would sell him milk or bread or 
meat or any service or commodity whatever. But 
instead of growing prosperous, this much-protected man 
had to fly from a place where his own market was thus 



106 PROTECTION OR FREE TRADE? 

reserved for his own productions. What protectionists 
ask us to do to ourselves in reserving our home market 
for home producers, is in kind what the Land Leaguers 
did to Captain Boycott. They ask us to boycott our- 
selves. 

In order to convince us that this would be for our 
benefit, no little ingenuity has been expended. It is 
asserted (1) that restrictions on foreign trade are bene- 
ficial because home trade is more profitable than foreign 
trade ; (2) that even if these restrictions do compel people 
to pay higher prices for the same commodities, the real 
cost is no greater, and (3) that even if the cost is greater 
they get it back again. 

Strangely enough, the first of these propositions is for- 
tified by the authority of Adam Smith. In Book II,, Chap, 
ter v., of " The Wealth of Nations," occurs this passage : 

The capital which is employed in purchasing in one part of the 
country in order to sell in another the produce of the industry of 
that country, generally replaces by every such operation two distinct 
capitals that had both been employed in the agriculture or manufac- 
tures of that country, and thereby enables them to continue that 
employment. . . . The capital which sends Scotch manufactures 
to London, and brings back English com and manufactures to Edin- 
burgh, necessarily replaces by every such operation two British 
capitals which had both been employed in the agriculture or manu- 
factures of Great Britain. 

The capital employed in purchasing foreign goods for home con- 
sumption, when this purchase is made with the produce of domestic 
industry, replaces, too, by every such operation, two distinct capi- 
tals : but one of them only is employed in supporting domestic indus- 
try. The capital which sends British goods to Portugal, and brings 
back Portuguese goods to Great Britain, replaces by every such 
operation only one British capital. The other is a Portuguese one. 
Though the returns, therefore, of the foreign trade of consumption 
should be as quick as those of the home trade, the oapital employed 
in it will give but one-half the encouragement to the industry or 
productive labor of the country. 



THE HOME MARKET AND HOME TRADK 107 

This astonishing proposition, of which Adam Smith 
never seemed to see the significance,* is one of the incon- 
sistencies into which he was led by his abandonment of 
the solid ground from which labor is regarded as the 
prime factor in production for that from which capital 
is so regarded— a confusion of thought which has ever 
since befogged political economy. This passage is 
quoted approvingly by protectionist writers, and made 
by them the basis of assertions even more absurd, if that 
be possible. Yet the fallacy ought to be seen at a glance. 
It is of the same nature as the Irishman's division, " Two 
for you two, and two for me, too," and depends upon the 
introduction of a term "British," which includes in its 
meaning two of the terms previously used, "English" 
and "Scotch." If we substitute for the terms used by 
Adam Smith other terms of the same relation we may 
obtain, with equal validity, such propositions as this : If 
Episcopalians trade with Presbyterians, two profits are 
made by Protestants ; whereas when Presbyterians trade 
with Catholics only one profit goes to Protestants. There- 
fore, trade between Protestants is twice as profitable as 
trade between Protestants and Catholics. 



* In the next paragraph Adam Smith goes on to cany this prop- 
osition to an unconscious reductio ad absurdum. He says : 

" A capital therefore employed in the home trade will sometimes 
make twelve operations, or be sent out and returned twelve times, 
before a capital employed in the foreign trade of consumption has 
made one. If the capitals are equal, therefore, the one will give 
four-and-twenty times more encouragement and support to the 
industry of the country than the other." 

This is just such a proposition as that an innkeeper who permits 
his guests to stay with him only one day can, with equal facili- 
ties, furnish twelve times as much entertainment to man and beast 
as can the innkeeper who permits each guest to stay with him twelve 
days. 



108 PROTECTION OR FREE TRADE t 

In Adam Smith's illustration there are two quantities 
of British goods, one in Edinburgh and one in London. 
In the domestic trade which he supposes, these two 
quantities of British goods are exchanged; but if the 
Scotch goods be sent to Portugal instead of to England 
and Portuguese goods brought back, only one quantity 
of British goods is exchanged. There will be only one- 
half the replacement in Great Britain, but there has been 
only one-half the displacement. The Edinburgh goods 
which have been sent away have been replaced with 
Portuguese goods ; but the London goods have not been 
replaced with anything, because they are still there. In 
the one case twice the amount of British capital is 
employed as in the other, and consequently double 
returns show equal profitableness. 

The arguments by which it is attempted to prove that 
it is no hardship to a people to be forced to pay higher 
prices to home producers for goods they can more 
cheaply obtain by importation are of no better consis- 
tency. The real cost of commodities, it is declared, is 
not to be measured by their price but by the labor 
needed to produce them, and hence, as it is put, though 
higher wages, interest, taxes, etc., may make it impos- 
sible to produce certain things for as low a price in one 
country as in another, their real cost is no greater, if no 
greater amount of labor is needed for their production, 
and thus a nation loses nothing by shutting out the 
cheaper foreign products. 

The fallacy is in the assumption that equal amounts of 
labor always produce equal results. A first-class portrait- 
painter may be able to do whitewashing with no more 
labor than a professional whitewasher, but it would 
nevertheless be a loss to him to take time in which he 
might earn the wages of a portrait-painter in order to do 
whitewashing that he might get done for the wages of a 



THE HOME MARKET AND HOME TRADE. 109 

whitewasher. Nor would his loss be the less real if he 
chose to average his income so as to credit himself with 
as much for whitewashing as for portrait-painting. In 
the same way, it is not the amount of labor required to 
produce a thing here or there which determines whether 
it can be more profitably obtained by home production 
or by importation, but the relation between what the 
same labor could produce in that and in other employ- 
ments. This is shown by price. Though as between 
different times and places the prices of things do not 
accurately indicate the relative quantity and quality of 
labor necessary to obtain them, they do in the same time 
and place. If at any given time, in any given place, a 
certain commodity cannot be produced for as low a price 
as it can be imported for, this is not necessarily proof 
that it would take more labor to produce it in the given 
place, but it is proof that labor there and then can be 
more profitably employed. And when industry is 
diverted from more profitable to less profitable occupa- 
tions, though the capital and labor so transferred may be 
compensated by duties or bounties, there must be a loss 
to the people as a whole. 

The argument that the higher prices which the tariff 
enables certain home producers to charge involve no loss 
to those who pay them is thus put by Horace Greeley 
(" Political Economy," p. 150) : 

I never made any iron, nor had any other than a public, general 
interest in making any, while I have bought and used many thou- 
sands of dollars' worth, in the shape of power-presses, engines, 
boilers, building-plates, etc. It is to my interest, you say, to have 
cheap iron. Certainly ; but I buy iron, not (vdtimately and really) 
with money, but with the product of my labor— that is, with news- 
papers ; and I can better afford to pay $70 per ton for iron made by 
men who can and do buy American newspapers than take it for $50 
of those who rarely see and never buy one of my products. The 
money price of the American iron m&j be higher, but its real cost 



110 PROTECTION OR FREE TRADE? 

to me is less than that of the British iron. And my case is that of 
the great body of American farmers and other producers of exchange- 
able wealth. 

The fallacy is in the assumption that the ability of 
certain persons to buy American newspapers depends 
upon their making of iron, whereas it depends upon 
their making of something. Newspapers are not bought 
with iron, nor do newspaper publishers buy iron with 
newspapers. These transactions are effected with money, 
which represents no single form of wealth, but value in 
aU forms. If, instead of making iron, the men to whom 
Mr. Greeley refers had made something else which was 
exchanged for British iron, Mr. Greeley's purchase of 
this foreign iron would have been just as truly an 
exchange of his products for theirs. The $20 per ton 
additional which the tariff compelled him to pay for iron 
represented a loss to him which was not a gain to any 
one else. For on Mr. Greeley's supposition that the 
tariff was necessary to give American iron-makers the 
same remuneration such labor could have obtained in 
other pursuits, its effect was simply to compel the 
expenditure of $70 worth of labor to obtain what other- 
wise could have been obtained by $50 worth of labor. 
To do this was necessarily to lessen the wealth of the 
country as a whole, and to reduce the fund available for 
the purchase of newspapers and other articles. This 
loss is as certain and is of the same kind as if Mr. 
Greeley had been compelled to employ portrait-painters 
to do whitewashing. 

The more popular forms of this argument that protec- 
tion costs nothing, hardly need analysis. If, as is 
asserted, consumers lose nothing in the higher prices the 
tariff compels them to pay, because these prices are paid 
to our own people, then producers would lose nothing if 
compelled to sell to their fellow-citizens below cost. If 



THE HOME MARKET AND HOME TRADE. Ill 

workmen are necessarily compensated for high-priced 
goods by the increased demand for their labor, then man- 
ufacturers would be compensated for high-priced labor by 
the increased demand for their goods. In short, on this 
reasoning it makes no difference to anybody whether the 
price of anything is high or low. When farmers com- 
plain of the high charges of railroads, they are making 
much ado about nothing j and workmen are taking need- 
less trouble when they demand an increase of wages, 
while employers are quite as foolish when they try to cut 
wages down. 



CHAPTER XII. 

EXPORTS AND IMPOETS. 

THE aim of protection is to diminish imports, never 
to diminish exports. On the contrary, the protec- 
tionist habit is to regard exports with favor, and to con- 
sider the country which exports most and imports least 
as doing the most profitable trade. When exports 
exceed imports there is said to be a favorable balance 
of trade. When imports exceed exports there is said to 
be an unfavorable balance of trade. In accordance with 
his idea all protectionist countries afford every facility 
for sending things away and fine men for bringing 
things in. 

If the things which we thus try to send away and 
prevent coming in were pests and vermin — things of 
which aU men want as little as possible— this policy 
would conform to reason. But the things of which 
exports and imports consist are not things that nature 
forces on us against our will, and that we have to strug- 
gle to rid ourselves of ; but things that nature gives only 
in return for labor, things for which men make exer- 
tions and undergo privations. Him who has or can 
command much of these things we call rich; him who 
has little we call poor ; and when we say that a country 
increases in wealth we mean that the amount of these 
things which it contains increases faster than its popula- 
tion. What, then, is more repugnant to reason than the 

112 



EXPORTS AND IMPORTS. 113 

notion that the way to increase the wealth of a country 
is to promote the sending of such things away and to 
prevent the bringing of them in? Could there be a 
queerer inversion of ideas? Should we not think even 
a dog had lost his senses that snapped and snarled when 
given a bone, and wagged his tail when a bone was taken 
from him ? 

Lawyers may profit by quarrels, doctors by diseases, 
rat-catchers by the prevalence of vermin, and so it may 
be to the interest of some of the individuals of a nation 
to have as much as possible of the good things which we 
call " goods " sent away, and as little as possible brought 
in. But protectionists claim that it is for the benefit of 
a community, as a whole, of a nation considered as one 
man, to make it easy to send goods away and difficult to 
bring them in. 

Let us take a community which we must perforce con- 
sider as a whole— that country, with a population of one, 
which the genius of De Foe has made familiar not only 
to English readers but to the people of all European 
tongues. 

Robinson Crusoe, we will suppose, is stiU living alone 
on his island. Let us suppose an American protectionist 
is the first to break his solitude with the long yearned-for 
music of human speech. Crusoe's delight we can well 
imagine. But now that he has been there so long he 
does not care to leave, the less since his visitor tells him 
that the island, having now been discovered, will often be 
visited by passing ships. Let us suppose that after hav- 
ing heard Crusoe's story, seen his island, enjoyed such 
hospitality as he could offer, told him in return of the 
wonderful changes in the gi*eat world, and left him books 
and papers, our protectionist prepares to depart, but 
before going seeks to offer some kindly warning of the 
danger Crusoe will be exposed to from the "deluge of 



114 PROTECTION OR FREE TRADE? 

cheap goods'' that passing ships will seek to exchange 
for fruit and goats. Imagine him to tell Crusoe just 
what protectionists tell larger communities, and to warn 
him that, unless he takes measures to make it difficult to 
bring these goods ashore, his industry will be entirely 
ruined. "In fact," we may imagine the protectionist to 
say, "so cheaply can all the things you require be pro- 
duced abroad that unless you make it hard to land them 
I do not see how you will be able to employ your own 
industry at all." 

" Will they give me all these things 1 " Robinson Crusoe 
would naturally exclaim. " Do you mean that I shall get 
all these things for nothing and have no work at all to 
do ? That will suit me completely. I shall rest and read 
and go fishing for the fun of it. I am not anxious to 
work if without work I can get the things I want." 

" No, I don't quite mean that," the protectionist would 
be forced to explain. "They will not give you such 
things for nothing. They will, of course, want some- 
thing in return. But they will bring you so much and 
will take away so little that your imports will vastly 
exceed your exports, and it will soon be difficult for you 
to find emplojrment for your labor." 

" But I don't want to find employment for my labor," 
Crusoe would naturally reply. " I did not spend months 
in digging out my canoe and weeks in tanning and sew- 
ing these goatskins because I wanted employment for 
my labor, but because I wanted the things. If I can get 
what I want with less labor, so much the better, and the 
more I get and the less I give in the trade you tell me I 
am to carry on— or, as you phrase it, the more my 
imports exceed my exports— the easier I can live and the 
richer I shaU be. I am not afraid of being overwhelmed 
with goods. The more they bring the better it will suit 
me." 



EXPORTS AND IMPORTS. 116 

And so the two might part, for it is certain that no 
matter how long our protectionist talked the notion that 
his industry would be ruined by getting things with less 
labor than before would never frighten Crusoe. 

Yet, are these arguments for protection a whit more 
absurd when addressed to one man living on an island 
than when addressed to sixty millions living on a con- 
tinent? What would be true in the case of Robinson 
Crusoe is true in the case of Brother Jonathan. If for- 
eigners will bring us goods cheaper than we can make 
them ourselves, we shall be the gainers. The more we 
get in imports as compared with what we have to give in 
exports, the better the trade for us. And since foreigners 
are not liberal enough to give us their productions, but 
will only let us have them in return for our own produc- 
tions, how can they ruin our industry? The only way 
they could ruin our industry would be by bringing us 
for nothing all we want, so as to save us the necessity 
for work. If this were possible, ought it seem very 
dreadful? 

Consider this matter in another way : To impose taxes 
on exports in order that home consumers might get the 
advantage of lower prices would be quite as just as to 
impose taxes on imports in order that home producers 
may get the advantage of higher prices, and it would be 
far more conformable to the principle of "the greatest 
good of the greatest number," since all of us are con- 
sumers, while only a few of us are producers of the 
things that can be raised in price by taxes on imports. 
And since the wealthy country is the country that in 
proportion to its population contains the largest quanti- 
ties of the things of which exports and imports consist, 
it would be a far more plausible method of national en- 
richment to keep such things from going out than to keep 
them from coming in. 



lie PROTECTION OR FREE TRADE! 

Now, supposing it were seriously proposed, as a means 
for enriching the United States, to put restrictive duties 
on the carrying out of wealth instead of the bringing in 
of wealth. It is certain that this would be opposed by 
protectionists. But what objection could they make ? 

The objection they would make would be in substance 
this: "The sending away of things in trade from one 
country to another does not involve a loss to the country 
from which they are sent, but a gain, since other things 
of more value are brought back in return for them. 
Therefore, to place any restriction upon the sending 
away of things would be to lessen instead of to increase 
the wealth of a country." This is true. But to say this, 
is to say that to restrict exports would be injurious 
because it would diminish imports. Yet, to diminish 
imports is the direct aim and effect of protective tariffs. 

Exports and imports, so far as they are induced by 
trade, are correlative. Each is the cause and comple- 
ment of the other, and to impose any restrictions on the 
one is necessarily to lessen the other. And so far from 
its being the mark of a profitable commerce that the 
value of a nation's exports exceeds her imports, the 
reverse of this is true. 

In a profitable international trade the value of imports 
will always exceed the value of the exports that pay for 
them, just as in a profitable trading voyage the return 
cargo must exceed in value the cargo carried out. This 
is possible to all the nations that are parties to commerce, 
for in a normal trade commodities are carried from places 
where they are relatively cheap to places where they are 
relatively dear, and their value is thus increased by the 
transportation, so that a cargo, arrived at its destination 
has a higher value than on leaving the port of its expor- 
tation. But on the theory that a trade is profitable only 
when exports exceed imports, the only way for all coun- 



EXPORTS AND IMPORTS. H7 

tries to trade profitably with one another would be to 
carry commodities from places where they are relatively 
dear to places where they are relatively cheap. An inter- 
national trade made up of such transactions as the expor- 
tation of manufactured ice from the West Indies to New 
England, and the exportation of hothouse fruits from 
New England to the West Indies, would enable all coun- 
tries to export much larger values than they imported. 
On the same theory the more ships sunk at sea the better 
for the commercial world. To have all the ships that 
left each country sunk before they could reach any other 
country would, upon protectionist principles, be the 
quickest means of enriching the whole world, since all 
countries could then enjoy the maximum of exports with 
the minimum of imports. 

It must, however, be borne in mind that all exporting 
and importing are not the exchanging of products. 
This, however, is a fact which puts in still stronger light, 
if that be possible, the absurdity of the notion that an 
excess of exports over imports shows increasing wealth. 
When Rome was mistress of the world, Sicily, Spain, 
Africa, Egypt, and Britain exported to Italy far more 
than they imported from Italy. But so far from this 
excess of their exports over their imports indicating 
their enrichment, it indicated their impoverishment. It 
meant that the wealth produced in the provinces was 
being drained to Rome in taxes and tribute and rent, for 
which no return was made. The tribute exacted by 
Germany from France in 1871 caused a large excess of 
French exports over imports. So in India the "home 
charges" of an alien government and the remittances of 
alien officials secure a permanent excess of exports over 
imports. So the foreign debt which has been fastened 
upon Egypt requires large amounts of the produce of 
that country to be sent away for which there is no 



118 PROTECTION OR FREE TRADE! 

return in imports. And so for many years the exports 
from Ireland have largely exceeded the imports into 
Ireland, owing to the rent drain of absentee landlords. 
The Irish landlords who live abroad do not directly draw 
produce for their rent, n'or yet do they draw money. 
Irish cattle, hogs, sheep, butter, linen and other produc- 
tions are exported as if in the regular course of trade, 
but their proceeds, instead of coming back to Ireland as 
imports, are, through the medium of bank and mercan- 
tile exchanges, placed to the credit of the absent land- 
lords, and used up by them. This drain of commodities 
in return for which no commodities are imported, would 
be greater yet were it not for the fact that thousands of 
Irishmen cross the Channel every summer to help get in 
the English harvests, and then return home, and that 
from those who have permanently emigrated to other 
countries there is a constant stream of remittances to 
relatives left behind.* 

The last time I crossed to England I sat at the steamer 
table by two young Englishmen, who drank much cham- 
pagne and in other ways showed they had plenty of 
money. As we became acquainted I learned that they 
were younger sons of English " county families," gradu- 
ates of a sort of school which has been established in 

* In Dublin in 1882 I several times met the secretary of one of 
the great banking institutions whose branches ramify through Ire- 
land. Each time he asked my opinion of the crop prospects in the 
United States, as though that were uppermost in his mind whenever 
he met an American. Finally I said to him, " I suppose poor crops in 
the United States would be to your advantage, as they would increase 
the value of the agricultural products that Ireland exports." " Oh, 
no," he replied ; "we are greatly interested in having the American 
crops good. Good crops mean good times, and good times in the 
United States mean large remittances from the Irish in America to 
their families at home, and these remittances are more important 
to business here than the prices we get for our own products." 



EXPORTS AND IMPORTS. 119 

Iowa for wealthy young Englishmen who wish to become 
"gentlemen farmers" or "estate-owners" in the United 
States. Each had got him a considerable tract of new 
land, had cut it up into farms, erected on each farm a 
board house and barn, and then rented these farms to 
tenants for half the crops. They liked America, they 
said ; it was a good country to have an estate in. The 
land laws were very good, and if a tenant did not pay 
promptly you could get rid of him without long formal- 
ity. But they preferred to live in England, and were 
going back to enjoy their incomes there, having put their 
affairs in the hands of an agent, to whom the tenants 
were required to give notice when they wished to reap 
their crops, and who saw that the landlord's half was 
properly rendered. Thus in this case half the crop (less 
commissions) of certain Iowa farmers must annually be 
exported without any return in imports. And this tide 
of exports for which no imports come back is only 
commencing to flow. Many Englishmen already own 
American land by the hundred thousand, and even by 
the million acres, and are only beginning to draw rent 
and royalties. Punch recently had a ponderous joke, the 
point of which was that the British House of Lords had 
much greater landed interests in the United States than 
in Great Britain. If not true already, it will not under 
present conditions be many years before the English 
aristocracy will draw far larger incomes from their 
American estates than from their home estates— incomes 
to supply which we must export without any return in 
imports.* 

* The Chicago Tribune of January 25, 1886, contains a long account 
of the American estates of an Irish landlord, William Scully. This 
Scully, who was one of the most notorious of the rack-renting and 
evicting Irish landlords, owns from 75,000 to 90,000 acres of the 
richest land in Illinois, besides large tracts in other States. His 



120 PROTECTION OR FREE TRADE? 

In the commerce which goes on between the United 
States and Europe there are thus other elements than 
the exchange of productions. The sums borrowed of 
Europe by the sale of railway and other bonds, the sums 
paid by Europeans for land in the United States or 
invested in industrial enterprises here, capital brought by 
emigrants, what is spent by Europeans traveling here, and 
some small amounts of the nature of gifts, legacies, and 
successions tend to sweU our imports or reduce our exports. 

On the other hand, not only do we pay in exports to 
Europe for our imports from Brazil, India, and such 
countries, but interest on bonds and other obligations, 
profits on capital invested here, rent for American land 
owned abroad, remittances from immigrants to relatives 
at home, property passing by will or inheritance to 
people abroad, payments for ocean transportation 
formerly carried on by our own vessels but now carried 
on by foreign vessels, the sums spent by American 
tourists who every year visit Europe, and by the increas- 
ing number of rich Americans who live in Europe, all 
contribute to swell our exports and reduce our imports. 

estates are cut up into farms and rented to tenants who are obliged 
to pay all taxes and make all improvements, and who are not per- 
mitted to sell their crops until the rent is paid. A "spy system" is 
maintained, and tenants are required to doff their hats when they 
enter the "estate office." The Tribune describes them as reduced 
to a condition of absolute serfdom. The houses in which they live 
are the poorest shanties, consisting generally of a room and a half, 
and the whole district is described as blighted. Scully got most of 
his land at nominal prices, ranging as low as seventy-five cents per 
acre. He lives in London, and is said to draw from his American 
estates a net income of $400,000 a year, which means, of course, 
that American produce to that value is exported every year without 
any imports coming back. The Tribune closes its long account by 
saying: "Not content with acquiring land himself, Scully has 
induced a number of his relatives to become American landlords, 
and their system is patterned on his own." 



EXPORTS AND IMPORTS. 121 

The, annual balance against us on these accounts is 
already very large and is steadily growing larger. Were 
we to prevent importations absolutely we should still 
have to export largely in order to pay our rents, to meet 
interest, and to provide for the increasing number of 
rich Americans who travel or reside abroad. But the 
fact that our exports must now thus exceed our imports 
instead of being what protectionists take it for, an evi- 
dence of increasing prosperity, is simply the evidence of 
a drain upon national wealth like tiiat which has so 
impoverished Ireland. 

But this drain is not to be stopped by tariffs. It pro- 
ceeds from a deeper cause than any tariff can touch, and 
is but part of a general drift. Our internal commerce also 
involves the flow from country to city, and from West to 
East, of commodities for which there is no return. Our 
large mine-owners, ranch-owners, land speculators, and 
many of our large farmers, live in the great cities. Our 
small farmers have had in large part to buy their farms 
on mortgage of men who live in cities to the east of 
them ; the bonds of the national. State, county, and muni- 
cipal governments are largely so held, as are the stocks 
and bonds of railway and other companies— the result 
being that the country has to send to the cities, the West 
to the East, more than is returned. This flow is increas- 
ing, and, no matter what be our tariff legislation, must 
continue steadily to increase, for it springs from the 
most fundamental of our social adjustments, that which 
makes land private property. As the land in Illinois, or 
Iowa, or Oregon, or New Mexico owned by a resident of 
New York or Boston increases in value, people who live 
in those States must send more and more of their prod- 
uce to the New Yorker or Bostonian. They may work 
hard, but grow relatively poorer ; he may not work at all, 
but grow relatively richer, so that when they need capital 



122 PROTECTION OR FREE TRADE? 

for building railroads or any other purpose, they must 
borrow and pay interest, while he can lend and get 
interest. The tendency of the time is thus to the owner- 
ship of the whole country by residents of cities, and it 
makes no difference to the people of the country districts 
whether those cities are in America or Europe. 



CHAPTER XIII. 

CONFUSIONS ARISING FROM THE USE OF MONEY. 

THERE is no one who in exchanging his own produc- 
tions for the productions of another would think 
that the more he gave and the less he got the better off 
he would be. Yet to many men nothing seems clearer 
than that the more of its own productions a nation sends 
away, and the less of the productions of other nations it 
receives in return, the more profitable its trade. So 
wide-spread is this belief that to-day nearly all civilized 
nations endeavor to discourage the bringing in of the 
productions of other nations while regarding with satis- 
faction the sending away of their own. 

What is the reason of this ? Men are not apt to apply 
to the transactions of nations principles opposite to those 
they apply to individual transactions. On the contrary, 
the natural tendency is to personify nations, and to 
think and speak of them as actuated by the same motives 
and governed by the same laws as the human beings of 
whom they are made up. Nor have we to look far to see 
that the preposterous notion that a nation gains by 
exporting and loses by importing actually arises from 
the application to the commerce between nations of ideas 
to which individual transactions accustom civilized men. 
What men dispose of to others we term their sales ; what 
they obtain from others we term their purchases. Hence 
we become accustomed to think of exports as sales, and 

128 



124 PROTECTION OR FREE TRADE? 

of imports as purchases. And as in daily life we habitu- 
ally think that the greater the value of a man's sales and 
the less the value of his purchases the better his busi- 
ness; so, if we do not stop to fix the meaning of the 
words we use, it seems a matter of course that the more 
a nation exports and the less it imports the richer it will 
become. 

It is significant of its origin that such a notion is 
unknown among savages. Nor could it have arisen 
among civilized men if they were accustomed to trade as 
savages do. Not long ago a class of traders called 
" soap-fat men " used to go from house to house exchang- 
ing soap for the refuse fat accumulated by housewives. 
In this petty commerce, carried on in this primitive 
manner, the habit of thinking that in a profitable trade 
the value of sales must exceed the value of purchases 
could never have arisen, it being clearly to the interest of 
each party that the value of what he sold (or exported) 
should be as little as possible, and the value of what he 
bought (or imported) as great as possible. But in civi- 
lized society this is only the exceptional form of trade. 
Buying and selling, as our daily life familiarizes us with 
them, are not the exchange of commodities for commodi- 
ties, but the exchange of money for commodities, or of 
commodities for money. 

It is to confusions of thought growing out of this use 
of money that we may trace the belief that a nation 
profits by exporting and loses by importing— a belief to 
which countless lives and incalculable wealth have been 
sacrificed in bloody wars, and which to-day molds the 
policy of nearly aU civUized nations and interposes arti- 
ficial barriers to the commerce of the world. 

The primary form of trade is barter— the exchange of 
commodities for commodities. But just as when we 
begin to think and speak of length, weight or bulk, it is 



CONFUSIONS ARISING FEOM THE USE OF MONEY. 125 

necessary to adopt measures or standards by which these 
qualities can be expressed, so when trade begins there 
arises a need for some common standard by which the 
value of different articles can be apprehended. The 
difficulties attending barter soon lead, also, to the adop- 
tion by common consent of some commodity as a 
medium of exchange, by means of which he who wishes 
to exchange a thing for one or more other things is no longer 
obliged to find some one with exactly reciprocal desires, 
but is enabled to divide the complete exchange into 
stages or steps, which can be made with different per- 
sons, to the enormous saving of time and trouble. 

In primitive society, cattle, skins, shells and many 
other things have in a rude way fulfilled these functions. 
But the precious metals are so peculiarly adapted to this 
use that wherever they have become known mankind has 
been led to adopt them as money. They are at first used 
by weight, but a great step in advance is taken when 
they are coined into pieces of definite weight and purity, 
so that no one who receives them needs to take the 
trouble of weighing and testing them. As civilization 
advances, as society becomes more settled and orderly, 
and exchanges more numerous and regular, gold and 
silver are gradually superseded as mediums of exchange 
by credit in various forms. By means of accounts cur- 
rent, one purchase is made to balance another purchase 
and one debt to cancel another debt. Individuals or 
associations of recognized solvency issue bills of ex- 
change, letters of credit, notes and drafts, which largely 
take the place of coin; banks transfer credits between 
individuals, and clearing-houses transfer credits between 
banks, so that immense transactions are carried on with 
a very small actual use of money ; and finally, credits of 
convenient denominations, printed upon paper, and 
adapted to transference trom hand to hand without 



126 PROTECTION OR FREE TRADE! 

indorsement or formality, being cheaper and more con- 
venient, take in part or in whole the place of gold or 
silver in the country where they are issued. 

This is, in brief, the history of that labor-saving instru- 
ment which ranges in its forms from the cowries of the 
African or the wampum of the red Indian to the bank- 
note or greenback, and which does so much to facilitate 
trade that without it civilization would be impossible. 
The part which it plays in social life and intercourse is 
so necessary, its use is so common in thought and speech 
and actual transaction, that certain confusions with 
regard to it are apt to grow up. It is not needful to 
speak of the delusion that interest grows out of the use 
of money, or that increase of money is increase of 
wealth, or that paper money cannot properly fulfil its 
functions unless an equivalent of coin is buried some- 
where, but only of such confusions of thought as have a 
relation to international trade. 

I was present yesterday when one farmer gave another 
farmer a horse and four pigs for a mare. Both seemed 
pleased with the transaction, but neither said, "Thank 
you." Yet when money is given for anything else it is 
usual for the person who receives the money to say, 
" Thank you," or in some other way to indicate that he 
is more obliged in receiving the money than the other 
party is in receiving the thing the money is given for. 
This custom is one of the indications of a habit of 
thought which (although it is clear that a dollar cannot 
be more valuable than a dollar's worth) attaches the idea 
of benefit more to the giving of money for commodities 
than to the giving of commodities for money. 

The main reason of this I take to be that difficulties of 
exchange are most felt on the side of reduction to the 
medium of exchange. To exchange anything for money 
it is necessary to find some one who wants that particular 



CONFUSIONS AEISING FROM THE USE OF MONEY. 127 

thing, but, this exchange effected, the exchange of money 
for other things is generally easier, since all who have 
anything to exchange are -willing to take money for it. 
This, and the fact that the value of money is more cer- 
tain and definite than the value of things measured by 
it, and the further fact that the sale or conversion of 
commodities into money completes those transactions 
upon which we usually estimate profit, easily lead us 
to look upon the getting of money as the object and 
end of trade, and upon selling as more profitable than 
buying. 

Further than this, money, being the medium of 
exchange— the thing that can be most quickly and easily 
exchanged for other things— is, therefore, the most con- 
venient in contingencies. In ruder times, before the 
organization of credit had reached such development as 
now, when the world was cut up into small states con- 
stantly warring with each other, when order was less 
well preserved, property far more insecure and the exhi- 
bition of riches often led to extortion; when pirates 
infested the sea and robbers the land; when fires were 
frequent and insurance had not been devised; when 
prisoners were held to ransom and capt\ired cities given 
up to sack, the contingencies in which it is important 
to have wealth in the form in which it can be most 
conveniently carried, readily concealed and speedily 
exchanged, were far more numerous than now, and 
every one strove to keep some part of his wealth in the 
precious metals. The peasant buried his savings, the 
merchant kept his money in his strong box, the miser 
gloated over his golden hoard and the prince sought to 
lay up a great treasure for time of sudden need. Thus 
gold and silver were even more striking symbols of 
wealth than now, and the habit of thinking of them as 
the only real wealth was formed. 



128 PROTECTION OR FREE TRADE T 

This habit of thought gave ready support to the pro- 
tective policy. When the growth of commerce made it 
possible to raise large revenues by indirect taxation, kings 
and their ministers soon discovered how easily the people 
could thus be made to pay an amount of taxes that they 
would have resisted if levied directly. Import taxes 
were first levied to obtain revenue, but not only was it 
found to be exceedingly convenient to tax goods in 
the seaport towns from whence they were distributed 
through the country, but the taxation of imported goods 
met with the warm support of such home producers as 
were thus protected from competition. An interest was 
thus created in favor of " protection," which availed itself 
of national prejudices and popular habits of thought, 
and a system was by degrees elaborated, which for cen- 
turies swayed the policy of European nations. 

This system, which Adam Smith attacked under the 
name of the mercantile system of political economy, 
regarded nations as merchants competing with each 
other for the money of the world, and aimed at enriching 
a country by bringing into it as much gold and silver as 
possible, and permitting as little as possible to flow out. 
To do this it was sought not only to prohibit the carry- 
ing of precious metals out of the country, but to encour- 
age the domestic production of goods that could be sold 
abroad, and to throw every obstacle in the way of similar 
foreign or colonial industries. Not only were heavy 
import duties or absolute prohibitions placed on such 
products of foreign industry as might come into competi- 
tion with home industry, but the exports of such raw 
materials as foreign industries might require were bur- 
dened with export duties or entirely prohibited under 
savage penalties of death or mutilation. Skilled work- 
men were forbidden to leave the country lest they might 
teach foreigners their art; domestic industries were 



CONFUSIONS ARISING FROM THE USE OF MONEY. 129 

encouraged by bounties, by patents of monopoly and by 
the creation of artificial markets— sometimes by pre- 
miums paid on exports, and sometimes by laws which 
compelled the use of their products. One instance of 
this was the act of Parliament which required every 
corpse to be buried in a woolen shroud, a piece of 
stupidity only paralleled by the laws under which the 
American people are taxed to bury in underground safes 
$2,000,000 of coined silver every month, and keep a 
hundred millions of gold lying idle in the treasury. 

But to attempt to increase the supply of gold and 
silver by such methods is both foolish and useless. 
Though the value of the precious metals is high their 
utility is low ; their principal use, next to that of money, 
being in ostentation. And just as a farmer would 
become poorer, not richer, by selling his breeding-stock 
and seed-grain to obtain gold to hoard and silver to 
put on his table, or as a manufacturer would lessen his 
income by selling a useful machine and keeping in his 
safe the money he got for it, so must a nation lessen its 
productive power by stimulating its exports or reducing 
its imports of things that could be productively used, in 
order to accumulate gold and silver for which it has no 
productive use. Such amounts of the precious metals as 
are needed for use as money will come to every nation 
that participates in the trade of the world, by virtue of a 
tendency that sets at naught all endeavors artificially to 
enhance supply, a tendency as constant as the tendency 
of water to seek a level. Wherever trade exists all com- 
modities capable of transportation tend to flow from 
wherever their value is relatively low to wherever their 
value is relatively high. This tendency is checked by 
the difficulties of transportation, which vary with differ- 
ent things as their bulk, weight and liability to injury 
compare with their value. The precious metals do not 



130 PROTECTION OR FREE TRADE! 

suffer from transportation, and having (especially gold) 
little weight and bulk as compared with their value, are 
so portable that a very slight change in their relative 
value is sufficient to cause their flow. So easily can they 
be carried and concealed that legal restrictions, backed 
by coast-guards and custom-house officials, have never 
been able to prevent them from finding their way out of 
a country where their value was relatively low and into 
a country where their value was relatively high. The 
attempts of her despotic monarchs to keep in Spain the 
precious metals she drew from America were like trying 
to hold water in a sieve. 

The effect of artificially increasing the supply of pre- 
cious metals in any country must be to lower their value 
as compared with that of other commodities. The 
moment, therefore, that restrictions by which it is 
attempted to attract and retain the precious metals, 
begin so to operate as to increase the supply of those 
metals, a tendency to their outflowing is set up, increas- 
ing in force as the efforts to attract and retain them 
become more strenuous. Thus all efforts artificially to 
increase the gold and silver of a country have had no 
result save to hamper industry and to make the country 
that engaged in them poorer instead of richer. This, 
experience has taught civilized nations, and few of them 
now make any direct efforts to attract or retain the pre- 
cious metals, save by uselessly hoarding them in burglar- 
proof vaults as we do. 

But the notion that gold and silver are the only true 
money, and that as such they have a peculiar value, still 
underlies protectionist arguments,* and the habit of asso- 

* For instance, Professor Thompson writing where and when, 
save for subsidiary tokens, paper money was exclusively used, and 
80 conscious of its ability to perform all the functions of money that 
he declares it to be as much superior to coin as the railway is to the 



CONFUSIONS ARISING FROM THE USE OF MONEY. 131 

dating incomes with sales, and expenditure with pur- 
chases, which is formed in the thought and speech of 
every-day life, still disposes men to accept a policy 
which aims at restricting imports by protective tariffs. 
Being accustomed to measure the profits of business men 
by the excess of their sales over their purchases, the 
assumption that the exports of a nation are equivalent 
to the sales of a merchant, and its imports to his pur- 
chases, leads easily to the conclusion that the greater the 
amount of exports and the less the amount of imports, 
the more profit a nation gets by its trade * 

Yet it needs only attention to see that this assumption 
involves a confusion of ideas. When we say that a mer- 
chant is doing a profitable business because his sales exceed 
his purchases, what we are really thinking of as sales is not 
the goods he sends out, but the money that we infer he 
takes in in exchange for them ; what we are really think- 
ing of as purchases is not the goods he takes in, but the 
money we infer he pays out. We mean, in short, that 
he is growing richer because his income exceeds his 
outgo. We become so used in ordinary affairs to this 
transposition of terms by inference, that when we think 
of a nation's exports as its sales and of its imports as its 
purchases, habit leads us to attach to these words the 

stage-coach ("Political Economy," p. 152), goes on subsequently 
(p. 223) to contend that protective duties are necessary to prevent the 
poorer country being drained of its money by the richer country, 
thus tacitly assuming that gold and silver alone are money— since 
neither he nor any one else would pretend that one country could* 
drain another of its paper money. 

* A conclusion frequently carried by protectionists to the most 
ridiculous lengths, as, for instance, in the recent declaration of a 
protectionist Senator (William M. Evarts of New York), that he 
would be ready for free trade "when protection had so far developed 
all our industries that the United States could sell in competition 
with all the world, and at the same time be free from the necessity 
of buying anything from all the world." 



132 PROTECTION OR FREE TRADEt 

same inferential meaning, and thns unconsciously to 
give to a word expressive of outgoing, the significance 
of incoming ; and to a word expressive of incoming, the 
significance of outgoing. But, manifestly, when we 
compare the trade of a merchant carried on in the usual 
way with the trade of a nation, it is not the goods that a 
merchant sells, but the money that he pays out, that is 
analogous to the exports of a country; not the goods 
that he buys, but the money he takes in, that is analo- 
gous to imports. It is only where the trade of a mer- 
chant is carried on by the exchange of commodities for 
commodities, that the commodities he sells are analogous 
to the exports, and the commodities he buys are analo- 
gous to the imports of a nation. And the village dealer 
who exchanges groceries and dry-goods for eggs, poultry 
and farm produce, or the Indian trader who exchanges 
manufactured goods for furs, is manifestly doing the 
more profitable business the more the value of the com- 
modities he takes in (his imports) exceeds the value of 
the goods he gives out (his exports). 

The fact is, that aU trade in the last analysis is simply 
what it is in its primitive form of barter, the exchange of 
commodities for commodities. The carrying on of trade 
by the use of money does not change its essential char- 
acter, but merely permits the various exchanges of which 
trade is made up to be divided into parts or steps, and 
thus more easily effected. When commodities are 
exchanged for money, but half a full exchange is com- 
pleted. When a man sells a thing for money it is to use 
the money in buying some other thing— and it is only as 
money has this power that any one wants or wiU take it. 
Our common use of the word " money " is largely meta- 
phorical. We speak of a wealthy man as a moneyed 
man, and in talking of his wealtli say that he has so 
much " money," whereas the fact probably is, that though 



CONFUSIONS ARISING FROM THE USE OP MONET. 133 

he may be worth millions, he never has at any one time 
more than a few dollars, or at most a few hundred dol- 
lars, in his possession. His possessions really consist of 
houses, lands, goods, stocks, or of bonds or other obliga- 
tions to pay money. The possession of these things we 
speak of as the possession of money because we habitually 
estimate their value in money. If we habitually esti- 
mated value in shells, sugar or cattle, we would speak of 
rich men as having much of these, just as the use of 
postage-stamps as currency at the beginning of our civil 
war led to speaking of rich men in the slang of the day, 
as those who had plenty of " stamps." And so, when a 
merchant is doing a profitable business, though we speak 
of him as making or accumulating money, the fact is, 
save in very rare cases, that he is putting out money as 
fast as he gets it in. The shrewd business man does not 
stow away money. On the contrary, with the money he 
obtains from his sales he hastens to make other pur- 
chases. If he does not buy commodities for use in his 
business, or commodities or services for personal gratifi- 
cation, he buys lands, houses, stocks, bonds, mortgages 
or other things from which he expects a profitable return. 
The trade between nations, made up as it is of numer- 
ous individual transactions which separately are but parts 
or steps in a complete exchange, is in the aggregate, like 
the primitive form of trade, the exchange of commodities 
for commodities. Money plays no part in international 
trade, and the world has yet to reach that stage of civi- 
lization which will give us international money. The 
paper currency which in all civilized nations now con- 
stitutes the larger part of their money, is never exported 
to settle balances, and when gold or silver coin is 
exported or imported it is as a commodity, and its value 
is estimated at that of the bullion contained. What each 
nation imports is paid for in the commodities which it 



134 PROTECTION OR FREE TRADE? 

exports, unless received as loans or investments, or as 
interest, rent or tribute. Before commerce had reached 
its present refinement of division and sub-division this 
was in many individual cases clear enough. A vessel 
sailed from New York, Philadelphia or Boston carrying, 
on account of owner or shipper, a cargo of flour, lumber 
and staves to the "West Indies, where it was sold, and the 
proceeds invested in sugar, rum and molasses, which 
were brought back, or which, perhaps, were carried to 
Europe, there sold, and the proceeds invested in Euro- 
pean goods, which were brought home. At present the 
exporter and importer are usually different persons, but 
the biUs of exchange drawn by the one against goods 
exported are bought by the other, and used to pay for 
goods imported. So far as the country is concerned, the 
transaction is the same as though importers and exporters 
were the same persons, and that imports exceed exports 
in value is no more proof of a losing trade than that in 
the old times a trading ship brought home a cargo worth 
more than that she carried out was proof of an unprofi- 
table voyage. 



CHAPTER XIV. 

DO HIGH WAGES NECESSITATE PROTECTION? 

IN the United States, at present, protection derives 
strong support from the belief that the products of 
the lower-paid labor of other countries could undersell 
the products of our higher-paid labor if free competition 
were permitted. This belief not only leads working-men 
to imagine protection necessary to keep up wages— a 
matter of which I shall speak hereafter; but it also 
induces the belief that protection is necessary to the 
interests of the country at large— a matter which now 
falls in our way. 

And further than concerns the tariff this belief has 
important bearings. It enables employers to persuade 
themselves that they are serving general interests in 
reducing wages or resisting their increase, and greatly 
strengthens the opposition to the efforts of working-men 
to improve their condition, by setting against them a 
body of opinion that otherwise would be neutral, if not 
strongly in their favor. This is clearly seen in the case 
of the eight-hour system. Much of the opposition to 
this great reform arises from the belief that the increase 
of wages to which such a reduction of working-hours 
would be equivalent, would place the United States at a 
great disadvantage in production as compared with other 
countries. 

185 



136 PROTECTION OR FREE TRADE? 

It is evident that even those who most vociferously 
assert that we need a protective tariff on account of our 
higher standard of wages do not really believe it them- 
selves. For if protection be needed against countries of 
lower wages, it must be most needed against countries 
of lowest wages and least needed against countries of 
highest wages. Now, against what country is it that 
American protectionists most demand protection ? If we 
could have a protective tariff against only one country in 
the whole world, what country is it that American pro- 
tectionists would select to be protected against ? Unques- 
tionably it is Great Britain. But Great Britain, instead 
of being the country of lowest wages, is, next to the 
United States and the British colonies, the country of 
highest wages. 

" It is a poor rule that will not work both ways." If 
we require a protective tariff because of our high wages, 
then countries of low wages require free trade— or, at 
the very least, have nothing to fear from free trade. 
How is it, then, that we find the protectionists of France, 
Germany and other low-wage countries protesting that 
their industries wiU be ruined by the free competition 
of the higher-wage industries of Great Britain and the 
United States just as vehemently as our protectionists 
protest that our industries would be ruined if exposed 
to free competition with the products of the "pauper 
labor " of Europe ? 

As popularly put, the argument that the country of 
high wages needs a protective tariff runs in this way: 
"Wages are higher here than elsewhere; therefore, if 
the produce of cheaper foreign labor were freely admitted 
it would drive the produce of our dearer domestic labor 
out of the market." But the conclusion does not follow 
from the premise. To make it valid two intermediate 
propositions must be assumed: first, that low wages 



DO HIGH WAGES NECESSITATE PROTECTIONf 137 

mean low cost of production ; and second, that produc- 
tion is determined solely by cost— or, to put it in another 
way, that trade being free, everything wiU be produced 
where it can be produced at least cost. Let us examine 
these two propositions separately. 

If the country of low wages can undersell the country 
of high wages, how is it that though the American farm- 
hand receives double the wages of the English agricul- 
tural laborer, yet American grain undersells English 
grain? How is it that while the general level of wages 
is higher here than anywhere else in the world we never- 
theless do export the products of our high-priced labor 
to countries of lower-priced labor ? 

The protectionist answer is that American grain under- 
sells English grain, in spite of the difference of wages, 
because of our natural advantages for the production of 
grain ; and that the bulk of our exports consists of those 
crude productions in which wages are not so important 
an element of cost, since they do not embody so much 
labor as the more elaborate productions called manufac- 
tures. 

But the first part of this answer is an admission that 
the rate of wages is not the determining element in the 
cost of production, and that the country of low wages 
does not necessarily produce more cheaply than the 
country of high wages; while, as for the distinction 
drawn between the cruder and the more elaborate pro- 
ductions, it is evident that this is founded on the com- 
parison of such things by bulk or weight, whereas the 
only measure of embodied labor is value. A pound of 
cloth embodies more labor than a pound of cotton, but 
this is not true of a dollar's worth. That a small weight 
of cloth wiU exchange for a large weight of cotton, or a 
small bulk of watches for a large bulk of wheat, means 
simply that equal amounts of labor wiU produce larger 



138 PROTECTION OR FREE TRADET 

weights or bulks of the one thing than^f the other ; and 
in the same way the exportation of a certain value of 
grain, ore, stone or timber means the exportation of 
exactly as much of the produce of labor as would the 
exportation of the same value of lace or fancy goods. 

Looking further, we see in every direction that it is 
not the fact that low-priced labor gives advantage in 
production. If this is the fact how was it that the 
development of industry in the slave States of the Ameri- 
can Union was not more rapid than in the free States? 
How is it that Mexico, where peon labor can be had for 
from four to six dollars a month, does not undersell the 
products of our more highly paid labor ? How is it that 
China and India and Japan are not " flooding the world " 
with the products of their cheap labor ? How is it that 
England, where labor is better paid than on the Conti- 
nent, leads the whole of Europe in commerce and manu- 
factures? The truth is, that a low rate of wages does 
not mean a low cost of production, but the reverse. The 
universal and obvious truth is, that the country where 
wages are highest can produce with the greatest econ- 
omy, because workmen have there the most intelligence, 
the most spirit and the most ability ; because invention 
and discovery are there most quickly made and most 
readily utilized. The great inventions and discoveries 
which so enormously increase the power of human labor 
to produce wealth have all been made in countries where 
wages are comparatively high. 

That low wages mean inefficient labor may be seen 
wherever we look. Half a dozen Bengalese carpenters 
are needed to do a job that one American carpenter can 
do in less time. American residents in China get 
servants for almost nothing, but find that so many are 
required that servants cost more than in the United 
States] yet the Chinese who are largely employed in 



DO HIGH WAGES NECESSITATE PEOTECTIONf 139 

domestic service in California, and get wages that they 
would not have dreamed of in China, are efficient 
workers. Go to High Bridge, and you will see a great 
engine attended by a few men, exerting the power of 
thousands of horses in pumping up a small river for the 
supply of New York city, while on the Nile you may see 
Egyptian fellahs raising water by buckets and tread- 
wheels. In Mexico, with labor at four or five dollars a 
month, silver ore has for centuries been carried to the 
surface on the backs of men who climbed rude ladders, 
but when silver-mining began in Nevada, where labor 
could not be had for less than five or six dollars a day, 
steam-power was employed. In Russia, where wages are 
very low, grain is still reaped by the sickle and threshed 
with the flail or by the hoofs of horses, while in our 
Western States, where labor is very high as compared 
with the Russian standard, grain is reaped, threshed and 
sacked by machinery. 

If it were true that equal amounts of labor always 
produced equal results, then cheap labor might mean 
cheap production. But this is obviously untrue. The 
power of human muscle is, indeed, much the same every- 
where, and if his wages be sufficient to keep him in good 
bodily health the poorly paid laborer can, perhaps, exert 
as much physical force as the highly paid laborer. But 
the power of human muscles, though necessary to all 
production, is not the primary and efficient force in pro- 
duction. That force is human intelligence, and human 
muscles are merely the agency by which that intelligence 
makes connection with and takes hold of external things, 
so as to utilize natural forces and mold matter to con- 
formity with its desires. A race of intelligent pygmies 
with muscles no stronger than those of the grasshopper 
could produce far more wealth than a race of stupid 
giants with muscles as strong as those of the elephant. 



140 PROTECTION OR FREE TRADE? 

Now, intelligence varies with the standard of comfort, 
and the standard of comfort varies with wages. Wher- 
ever men are condemned to a poor, hard and precarious 
living their mental qualities sink toward the level of the 
brute. Wherever easier conditions prevail the qualities 
that raise man above the brute and give him power to 
master and compel external nature develop and expand. 
And so it is that the efficiency of labor is greatest where 
laborers get the best living and have the most leisure— 
that is to say, where wages are highest. 

How then, in the face of these obvious facts, can we 
account for the prevalence of the belief that the low- 
wage country has an advantage in production over the 
high- wage country? It cannot be charged to the teach- 
ing of protection. This is one of the fallacies which 
protectionism avails itself of, rather than one for which 
it is responsible. Men do not hold it because they are 
protectionists, but become protectionists because they 
hold it. And it seems to be as firmly held, and on occa- 
sion as energetically preached, by so-called free traders as 
by protectionists. Witness the predictions of free-trade 
economists that trades-unions, if successful in raising 
wages and shortening hours, would destroy England's 
ability to sell her goods to other nations, and the similar 
objections by so-called free traders to similar movements 
on the part of working-men in the United States. 

The truth is that the notion that low wages give a 
country an advantage in production is a careless infer- 
ence from the every-day fact that it is an advantage to 
an individual producer to obtain labor at low wages. 

It is true that an individual producer gains an advan- 
tage when he can force down the wages of his employees 
below the ordinary level, or can import laborers who 
will work for him for less, and that he may by this 
means be enabled to undersell his competitors, while the 



DO HIGH WAGES NECESSITATE PROTECTION? 141 

employer who continues to pay higher wages than other 
employers about him will, before long, be driven out of 
business. But it by no means follows that the country 
where wages are low can undersell the country where 
wages are high. For the efficiency of labor, though it 
may somewhat vary with the particular wages paid, is in 
greater degree determined by the general standard of 
comfort and intelligence, and the prevailing habits and 
methods which grow out of them. When a single 
employer manages to get labor for less than the rate of 
wages prevailing around him, the efficiency of the labor 
he gets is still largely fixed by that rate. But a country 
where the general rate of wages is low does not have a 
similar advantage over other countries, because there the 
general efficiency of labor must also be low. 

The contention that industry can be more largely 
carried on where wages are low than where wages are 
high, another form of the same fallacy, may readily be 
seen to spring from a confusion of thought. For 
instance, in the earlier days of California it was often 
said that the lowering of wages would be a great benefit 
to the State, as lower wages would enable capitalists to 
work deposits of low-grade quartz that it would not pay 
to work at the then existing rate of wages. But it is 
evident that a mere reduction of wages would not have 
resulted in the working of poorer mines, since it could 
not have increased the amount of labor or capital avail- 
able for the working of mines, and what existed would 
stUl have been devoted to the working of the richer in 
preference to the poorer mines, no matter how much 
wages were reduced. It might, however, have been said 
that the effect would be to increase the profits of capital 
and thus bring in more capital. But, to say nothing of 
the deterrent effect upon the coming in of labor, a 
moment's reflection wOl show that such a reduction of 



142 PROTECTION OR FREE TRADEt 

wages would not add to the profits of capital. It would 
add to the profits of mine-owners, and mines would 
bring higher prices. Eliminating improvements in 
methods, or changes in the value of the product, lower 
wages and the working of poorer mines come, of course, 
together, but this is not because the lower wages cause 
the working of poorer mines, but the reverse. As the 
richer natural opportunities are taken up and production 
is forced to devote itself to natural opportunities that 
will yield less to the same exertion, wages fall. There 
is, however, no gain to capital ; and under such circum- 
stances we do not see interest increase. The gain 
accrues to those who have possessed themselves of 
natural opportunities, and what we see is that the value 
of land increases. 

The immediate effect of a general reduction of wages 
in any country would be merely to alter the distribution 
of wealth. Of the amount produced less would go to 
the laborers and more to those who share in the results 
of production without contributing to it. Some changes 
in exports and imports would probably follow a general 
reduction of wages, owing to changes in relative demand. 
The working-classes, getting less than before, would 
have to reduce their luxuries, and perhaps live on 
cheaper food. Other classes, finding their incomes 
increased, might use more costly food and demand more 
of the costlier luxuries, and larger numbers of them 
might go abroad and use up in foreign countries the 
produce of exports, by which, of course, imports would 
be diminished. But except as to such changes the foreign 
commerce of a country would be unaffected. The coun- 
try as a whole would have no more to sell and could 
buy no more than before. And in a little while the 
inevitable effect of the degradation of labor involved in 
the reduction of wages would begin to tell in the reduced 



DO HIGH WAGES NECESSITATE PROTECTION? 143 

power of production, and both exports and imports 
would fall off. 

So if in any country there were a general increase of 
wages, the immediate effect would only be so to alter the 
distribution of wealth that more of the aggregate prod- 
uct would go to the laboring-classes and less to those 
who live on the labor of others. The result would be 
that more of the cheaper luxuries would be called for and 
less of the more costly luxuries. But productive power 
would in no wise be lessened ; there would be no less to 
export than before and no less ability to pay for imports. 
On the contrary, some of the idle classes would find their 
incomes so reduced that they would have to go to work 
and thus increase production, while as soon as an 
increase in wages began to tell on the habits of the 
people and on industrial methods productive power 
would increase. 



CHAPTER XV. 

OP ADVANTAGES AND DISADVANTAGES AS REASONS 
FOR PROTECTION. 

WE have seen that low wages do not mean low cost 
of production, and that a high standard of wages, 
instead of putting a country at a disadvantage in produc- 
tion, is really an advantage. This disposes of the claim 
that protection is rendered necessary by high wages, by 
showing the invalidity of the first assumption upon 
which it is based. But it is worth while to examine the 
second assumption in this claim — that production is 
determined by cost, so that a country of less advantages 
cannot produce if the free competition of a country of 
greater advantages be permitted. For while we are 
sometimes told that a country needs protection because 
of great natural advantages that ought to be developed, 
we are at other times told that protection is needed 
because of the sparseness of population, the want of 
capital or machinery or skill, or because of high taxes or 
a high rate of interest,* or other conditions which, it 
may be, involve real disadvantage. 

* The higher rate of interest in the United States than in Great 
Britain has until recently been one of the stock reasons of American 
protectionists for demanding a high tariff. We do not hear so much 
of this now that the rate in New York is as low as in London, if not 
lower, but we hear no less of the need for protection. It is hardly 
necessary in this discussion to treat of the nature and law of inter« 

144 



ADVANTAGES AND DISADVANTAGES. 145 

But without reference to the reality of the alleged 
advantage or disadvantage, all these special pleas for 
protection are met when it is shown, as it can be shown, 
that whatever be its advantages or disadvantages for 
production a country can always increase its wealth by 
foreign trade. 

If we suppose two countries each of which is, for any 
reason, at a decided disadvantage in some branch of pro- 
duction in which the other has a decided advantage, it is 
evident that the free exchange of commodities between 
them wiU be mutually beneficial, by enabling each to 
make up for its own disadvantage by availing itself of 
the advantage of the other, just as the blind man and 
the lame man did in the familiar story. Trade between 
them will give to each country a greater amount of all 
things than it could otherwise obtain with the same 
quantity of labor. Such a case resembles that of two 
workmen, each having as to some things skill superior to 
the other, and who, by working together, each devoting 
himself to that part for which he is the better fitted, can 
accomplish more than twice as much as if each worked 
separately. 

But let us suppose two countries, one of which has 
advantages superior to the other for all the productions 
of which both are capable. Trade between them being 
free, would one country do all the exporting and the 
other all the importing? That, of course, would be pre- 
posterous. Would trade, then, be impossible ? Certainly 

est, a subject which I have gone over in "Progress and Poverty." 
It may, however, be worth while to say that a high rate of interest 
where it does not proceed from insecurity, is not to be regarded as 
a disadvantage, but rather as evidence of the large returns to the 
active factors of production, labor and capital— returns which 
diminish as rent rises and the landowner gets a larger share of their 
produce for permitting labor and capital to work. 



146 PEOTECTION OR FREE TRADE? 

not. Unless the people of the country of less advantages 
transferred themselves bodily to the country of greater 
advantages, trade would go on with mutual benefit. 
The people of the country of greater advantages would 
import from the country of less advantages those prod- 
ucts as to which the difference of advantage between 
the two countries was least, and would export in return 
those products as to which the difference was greatest. 
By this exchange both peoples would gain. The people 
of the country of poorest advantages would gain by it 
some part of the advantages of the other country, and 
the people of the country of greatest advantages would 
also gain, since, by being saved the necessity of pro- 
ducing the things as to which their advantage was least, 
they could concentrate their energies upon the produc- 
tion of things in which their advantage was greatest. 
This case would resemble that of two workmen of differ- 
ent degrees of skill in all parts of their trade, or that of 
a skilled workman and an unskilled helper. Though the 
workman might be able to perform aU parts of the work 
in less time than the helper, yet there would be some 
parts in which the advantage of his superior skiU would 
be less than in others; and as by leaving these to the 
helper he could devote more time to those parts in which 
superior skill would be most effective, there would be, 
as in the former case, a mutual gain in their working 
together. 

Thus it is that neither advantages nor disadvantages 
afford any reason for restraining trade.* Trade is 

* In point of fact there is no country which as to all branches of 
production can be said to have superior advantages. The conditions 
which make one part of the habitable globe better fitted for some 
productions, unfit it for others, and what is disadvantage for some 
kinds of production, is generally advantage for other kinds. Even 
the lack of rain which makes some parts of the globe useless to man, 



ADVANTAGES AND DISADVANTAGES. 147 

always to the benefit of both parties. If it were not 
there would be no disposition to carry it on. 

And thus we see again the fallacy of the protectionist 
contention that if it takes no more labor to produce a 
thing in our country than elsewhere, we shall lose 
nothing by shutting out the foreign product, even 
though we have to pay a higher price for the home prod- 
uct. The interchange of the products of labor does not 
depend upon differences of absolute cost, but of com- 
parative cost. Goods may profitably be sent from places 
where they cost more labor to places where they cost less 
labor, provided (and this is the only case in which they 
ever will be so sent) that a still greater difference in 
labor-cost exists as to other things which the first coun- 
try 'desires to obtain. Thus tea, which Horace Greeley 
was fond of referring to as a production that might 
advantageously be naturalized in the United States by a 
heavy duty, could undoubtedly be produced in the United 
States at less cost of labor than in China, for in trans- 
portation to the seaboard, packing, etc., we could save 
upon Chinese methods. But there are other things, such 
as the mining of sUver, the refining of oil, the weaving 
of cloth, the making of clocks and watches, as to which 
our advantage over the Chinese is enormously greater 
than in the growing of tea. Hence, by producing these 
things and exchanging them directly or indirectly for 

may, if invention ever succeeds in directly utilizing the power of the 
Sim's rays, be found to be especially advantageous for certain parts 
of production. The advantages and disadvantages that come from 
the varying density of population, the special development of cer- 
tain forms of industry, etc., are also largely relative. The most 
positive of all advantages in production— that which most certainly 
gives superiority in all branches, is that which arises from that 
general intelligence which increases with the increase of the comfort 
and leisure of the masses of the people, that is to say, with the 
increase of wages. 



148 PROTECTION OR FREE TRADEt 

Chinese tea, we obtain, in spite of the long carriage, 
more tea for the same labor than we could get by grow- 
ing our own tea. 

Consider how this principle, that the interchange of 
commodities is governed by the comparative, not the 
absolute, cost of production, applies to the plea that 
protective duties are required on account of home taxa- 
tion. It is of course true that a special tax placed upon 
any branch of production puts it at a disadvantage 
unless a like tax is placed upon the importation of 
similar productions. But this is not true of such 
general taxation as falls on all branches of industry 
alike. As such taxation does not alter the comparative 
profitableness of industries it does not diminish the 
relative inducement to carry any of them on, and to 
protect any particular industry from foreign competition 
on account of such general taxation is simply to enable 
those engaged in it to throw off their share of a general 
burden. 

A favorite assumption of American protectionists is, 
or rather has been (for we once heard much more of it 
than now), that free trade is a good thing for rich coun- 
tries but a bad thing for poor countries— that it enables 
a country of better-developed industries to prevent the 
development of industry in other countries, and to make 
such countries tributary to itseK. But it follows from 
the principle which, as we have seen, causes and governs 
international exchanges, that for any country to impose 
restrictions on its foreign commerce on account of its 
own disadvantages in production is to prevent such 
amelioration of those disadvantages as foreign trade 
would bring. Free trade is voluntary trade. It cannot 
go on unless to the advantage of both parties, and, as 
between the two, free trade is relatively more advanta- 
geous to the poor and undeveloped country than to the 



ADVANTAGES AND DISADVANTAGES. 149 

rich and prosperous country. The opening up of trade 
between a Robinson Crusoe and the rest of the world 
would be to the advantage of both parties. But rela- 
tively the advantage would be far greater to Robinson 
Crusoe than to the rest of the world. 

There is a certain class of American protectionists who 
concede that free trade is good in itself, but who say that 
we cannot safely adopt it until all other nations have 
adopted it, or until aU other nations have come up to our 
standard of civilization; or, as it is sometimes phrased, 
until the millennium has come and men have ceased to 
struggle for their own interests as opposed to the inter- 
ests of others. And so British protectionists have now 
assumed the name of " Fair Traders." They have ceased 
to deny the essential goodness of free trade, but contend 
that so long as other countries maintain protective tariffs 
Great Britain, in self-defense, should maintain a protec- 
tive tariff too, at least against countries that refuse to 
admit British productions free. 

The fallacy underlying most of these American excuses 
for protection is that considered in the previous chapter 
—the fallacy that the country of low wages can undersell 
the country of high wages ; but there is also mixed with 
this the notion to which the British fail* traders appeal— 
the notion that the abolition of duties by any country is 
to the advantage, not of the people of that country, but 
of the people of the other countries that are thus given 
free access to its markets. " Is not the fact that British 
manufacturers desire the abolition of our protective tariff 
a proof that we ought to continue it?" ask American 
protectionists. "Is it not a suicidal policy to give for- 
eigners free access to our markets while they refuse us 
access to theirs ? " cry British fair traders. 

All these notions are forms of the delusion that to 
export is more profitable than to import, but so wide- 



150 PROTECTION OR FREE TRADE? 

spread and influential are they that it may be well to 
devote a few words to them. The direct effect of a tariff 
is to restrain the people of the country that imposes 
it. It curtails the freedom of foreigners to trade only 
through its operation in curtailing the freedom of 
citizens to trade. So far as foreigners are concerned it 
only indirectly affects their freedom to trade with that 
particular country, while to citizens of that country it is 
a direct curtailment of the freedom to trade with all the 
world. Since trade involves mutual benefit, it is true 
that any restriction that prevents one party from trading 
must operate in some degree to the injury of another 
party. But the indirect injury which a protective tariff 
inflicts upon other countries is diffused and slight, as 
compared with the injury it inflicts directly upon the 
nation that imposes it. 

To illustrate : The tariff which we have so long main- 
tained upon iron to prevent our people from exchanging 
their products for British iron has unquestionably 
lessened our trade with Great Britain. But the effect 
upon the United States has been very much more injuri- 
ous than the effect upon Great Britain. While it has 
lessened our trade absolutely, it has lessened the trade of 
Great Britain only with us. What Great Britain has 
lost in this curtailment of her trade with us she has 
largely made up in the consequent extension of her trade 
elsewhere. For the effect of duties on iron and iron ore, 
and of the system of which they are part, has been so to 
increase the cost of American productions as to give to 
Great Britain the greater part of the carrying trade of 
the world, for which we were her principal competitor, 
and to hand over to her the trade of South America and 
of other countries, of which, but for this, we should have 
had the largest share. 



ADVANTAGES AND DISADVANTAGES. 151 

And in the same way, for any nation to restrict the 
freedom of its own citizens to trade, because other 
nations so restrict the freedom of their citizens, is a 
policy of the " biting off one's nose to spite one's face " 
order. Other nations may injure us by the imposition of 
taxes which tend to impoverish their own citizens, for as 
denizens of the world it is to our real interest that all 
other denizens of the world should be prosperous. But 
no other nation can thus injure us so much as we shall 
injure ourselves if we impose similar taxes upon our own 
citizens by way of retaliation. 

Suppose that a farmer who has an improved variety 
of potatoes learns that a neighbor has wheat of such 
superior kind that it will yield many more bushels to the 
acre than that he has been sowing. He might naturally 
go to his neighbor and offer to exchange seed-potatoes 
for seed- wheat. But if the neighbor while willing to sell 
the wheat should refuse to buy the potatoes, would not 
our farmer be a fool to declare, " Since you will not buy 
my superior potatoes I will not buy your superior 
wheat ! " Would it not be very stupid retaliation for 
him to go on planting poorer seed and getting poorer 
crops ? 

Or, suppose, isolated from the rest of mankind, half a 
dozen men so situated and so engaged that mutual con- 
venience constantly prompts them to exchange produc- 
tions with one another. Suppose five of these six to be 
under the dominion of some curious superstition which 
leads them when they receive anything in exchange to 
bum one-half of it up before carrying home the other 
half. This would indirectly be to the injury of the sixth 
man, because by thus lessening their own wealth his five 
neighbors would lessen their ability to exchange with 
him. But, would he better himself if he were to say : 



152 PROTECTION OR FREE TRADE? 

"Since these fools will insist upon burning half of all 
they get in exchange I must, in seK-defense, follow their 
example and burn half of all I get " ? 

The constitution and scheme of things in this world in 
which we find ourselves for a few years is such that no 
one can do either good or evil for himself alone. No 
one can release himself from the influence of his sur- 
roundings, and say, " What others do is nothing to me ; " 
nor yet can any one say, "What I do is nothing to 
others." Nevertheless it is in the tendency of things 
that he who does good most profits by it, and he who 
does evil injures, most of all, himself. And those who 
say that a nation should adopt a policy essentially bad 
because other nations have embraced it are as unwise as 
those who say. Lie, because others are false j Be idle, 
because others are lazyj Refuse knowledge, because 
others are ignorant. 



CHAPTER XVI. 

THE DEVELOPMENT OF MANUFACTURES. 

ENGLISH protectionists, during the present century 
at least, struggled for the protection of agriculture, 
and the repeal of the corn-laws in 1864 was their Water- 
loo. On the Continent, also, it is largely agriculture that 
is held to need protection, and special efforts have been 
made to protect the German hog, even to the extent of 
shutting out its American competitor. But in the 
United States the favorite plea for protection has been 
that it is necessary to the establishment of manufac- 
tures ; and the prevalent American idea of protection is 
that it is a scheme for fostering manufactures. 

As a matter of fact, American protection has not been 
confined to manufactures, nor has there been any hesi- 
tation in imposing duties which by raising the cost of 
materials are the very reverse of encouraging to manu- 
factures. In the scramble which the protective system 
has induced, every interest capable of being protected 
and powerful enough to compel consideration in Congres- 
sional log-rolling has secured a greater or less share of 
protection— a share not based upon any standard of 
needs or merits, but upon the number of votes it could 
command. Thus wool, the production of which is one 
of the most primitive of industries, preceding even the 
tilling of the soil, has been protected by high duties, 
although certain grades of foreign wool are necessary to 

153 



154 PROTECTION OR FREE TRADE? 

American woolen-manufacturers, who have by these 
duties been put at a disadvantage in competing with 
foreign manufacturers. Thus iron ore has been protected 
despite the fact that American steel-makers need foreign 
ore to mix with American ore, and are obliged to import 
it even under the high duty. Thus copper ore has been 
protected, to the disadvantage of American smelters, as 
well as of all the many branches of manufacture into 
which copper enters. Thus salt has been protected, 
though it is an article of prime necessity, used in large 
quantities in such important industries as the curing of 
meats and fish, and entering into many branches of 
manufacture. Thus lumber has been protected in spite 
of its importance in manufacturing as weU as of the 
protests of all who have inquired into the consequences 
of the rapid clearing of our natural woodlands. Thus 
coal has been protected, though to many branches of 
manufacturing cheap fuel is of first importance. And so 
on, through the list. 

Protection of this kind is direct discouragement of 
manufactures. Nor yet is it encouragement of any 
industry, since its effect is, not to make production of 
any kind more profitable, but to raise the price of lands 
or mines from which these crude products are obtained. 

Yet in spite of all this discouragement of manufac- 
tures, of which the instances I have given are but 
samples, protection is still advocated as necessary to 
manufactures, and the growth of American manufactures 
is claimed as its result. 

So long and so loudly has this claim been made that 
to-day many of our people believe, what protectionist 
writers and speakers constantly assume, that but for 
protection there would not now be a manufacture of any 
importance carried on in the United States, and that 
were protection abolished the sole industry that this 



THE DEVELOPMENT OP MANXJFACTUEES. 155 

great country could carry on would be the raising of 
agricultural products for exportation to Europe. 

That so many believe this is a striking instance of our 
readiness to accept anything that is persistently dinned 
into our ears. For that manufactures grow up without 
protection, and that the effect of our protective tariff is 
to stunt and injure them, can be conclusively shown 
from general principles and from common facts. 

But first, let me call attention to a confusion of 
thought which gives plausibility to the notion that manu- 
factures should be "encouraged." Manufactures grow 
up as population increases and capital accumulates, and, 
in the natural order of industry, are best developed in 
countries of dense population and accumulated wealth. 
Seeing this connection, it is easy to mistake for cause 
what is really effect, and to imagine that manufacturing 
brings population and wealth. Here, in substance, is 
the argument which has been addressed to the people of 
the United States from the time when we became a 
nation to the present day: 

Manufacturing countries are always rich countries. Coun- 
tries that produce only raw materials are always poor. There- 
fore, if we would ie rich we must have manufactures, and in 
order to get manufactures we must encourage them. 

To many this argument seems plausible, especially as 
the taxes for the "encouragement" of the protected 
industries are levied in such a way that their payment is 
not realized. But I could make as good an argument to 
the people of the little town of Jamaica, near which I am 
now living, in support of a subsidy to a theater. I could 
say to them : 

" All large cities have theaters, and the more theaters 
it has, the larger the city. Look at New York ! New 
York has more theaters than any other city in America, 
and is consequently the greatest city in America. Phila- 



156 PROTECTION OR FREE TRADE? 

delphia ranks next to New York in the number and size 
of its theaters, and therefore comes next to Kew York in 
population and wealth. So, throughout the country, 
wherever you find large, weU-appointed theaters, you will 
find large and prosperous towns, while where there are 
no theaters the towns are small. Is it any wonder that 
Jamaica is so small and grows so slowly when it has no 
theaters at all? People do not like to settle in a place 
where they cannot occasionally go to the theater. If 
you want Jamaica to thrive you must take steps to build 
a fine theater, which will attract a large population. 
Look at Brooklyn ! Brooklyn was only a small riverside 
village before its people had the enterprise to start a 
theater, and see now, since they began to build theaters, 
how large a city Brooklyn has become." 

Modeling my argument on that addressed to American 
voters by the P*residential candidate of the Republican 
party in 1884, I might then drop into "statistics" and 
point to the fact that when theatrical representations 
first began in this country its population did not amount 
to a million ; that it was totally destitute of railroads and 
without a single mile of telegraph-wire. Such has been 
our progress since theaters were introduced that the 
census of 1880 showed that we had 50,155,783 people, 
97,907 miles of railroad and 291,212T>i5- miles of tele- 
graph-wires. Or I might go into greater detail, as some 
protectionist "statisticians" are accustomed to do. I 
might take the date of the building of each of the New 
York theaters, give the population and wealth of the city 
at that time, and then, by presenting the statistics of 
population and wealth a few years later, show that the 
building of each theater had been followed by a marked 
increase in population and wealth. I might point out 
that San Francisco had not a theater until the Ameri- 
cans came there, and was consequently but a straggling 



THE DEVELOPMENT OF MANUPACTUEES. 157 

village ; that the new-comers immediately set up theaters 
and maintained them more generously than any other 
similar population in the world, and that the conse- 
quence was the marvelous growth of San Francisco. I 
might show that Chicago and Denver and Kansas City, 
aU remarkably good theater towns, have also been 
remarkable for their rapid growth, and, as in the case of 
New York, prove statistically that the building of each 
theater these cities contain has been followed by an 
increase of population and wealth. 

Then, stretching out after protectionist fashion into 
the historical argument, I might refer to the fact that 
Nineveh and Babylon had no theaters that we know of, 
and so went to utter ruin; dilate upon the fondness of 
the ancient Greeks for theatrical entertainments con- 
ducted at public expense, and their consequent greatness 
in arts and arms ; point out how the Romans went even 
further than the Greeks in their encouragement of the 
theater, and built at public cost the largest theater in the 
world, and how Rome became the mistress of the nations. 
And, to embellish and give point to the argument, I 
might perhaps drop into poetry, recalling Byron's lines : 

When falls the Colosseum, Borne shall fall ; 
And when Rome falls— the world ! 

Recovering from this, I might cite the fact that in 
every province they conquered the Romans established 
theaters, as explaining the remarkable facility with 
which they extended their civilization and made the 
conquered provinces integral parts of their great empire ; 
point out that the decline of these theaters and the decay 
of Roman power and civilization went on together; and 
that the extinction of the theater brought on the night 
of the Dark Ages. Dwelling then a moment upon the 
rudeness and ignorance of that time when there were no 



158 PROTECTION OR FREE TRADE? 

theaters, I might triumphantly point to the beginning of 
modern civilization as contemporaneous with the revival 
of theatrical entertainments in miracle-plays and court 
masks. And showing how these plays and masks were 
always supported by monasteries, municipalities or princes, 
and how places where they began became sites of great 
cities, I could laud the wisdom of "encouraging infant 
theatricals." Then, in the fact that English actors, 
until recently, styled themselves her Majesty's serv- 
ants and that the Lord Chamberlain still has author- 
ity over the English boards, and must license plays 
before they can be acted, I could trace to a national 
system of subsidizing infant theatricals the foundation 
of England's greatness. Coming back to our own times, 
I could call attention to the fact that Paris, where 
theaters are still subsidized and actors still draw their 
salaries from the public treasury, is the world's metrop- 
olis of fashion and art, steadily growing in population 
and wealth, though other parts of the same country 
which do not enjoy subsidized theaters are either at a 
standstill or declining. And finally I could point to the 
astuteness of the Mormon leaders, who early in the settle- 
ment of Salt Lake built a spacious theater, and whose 
little village in the sage-brush, then hardly as large as 
Jamaica, has since the building of this theater grown to 
be a populous and beautiful city, and indignantly ask 
whether the virtuous people of Jamaica should allow 
themselves to be outdone by wicked polygamists. 

If such an argument would not induce the Jamaicans to 
tax themselves to " encourage " a theater, would it not at 
least be as logical as arguments that have induced the 
American people to tax themselves to encourage manu- 
factures ? 

The truth is that manufactures, like theaters, are the 
result, not the cause, of the growth of population and 
wealth. 



THE DEVELOPMENT OF MANUFACTURES. 159 

If we take a watch, a book, a steam-engine, a piece of 
dry-goods, or the product of any of the industries which 
we class as manufactures, and trace the steps by which 
the material of which it is composed has been brought 
from the condition in which it is aiforded by nature into 
finished form, we will see that to the carrying on of any 
manufacturing industry many other industries are neces- 
sary. That an industry of this kind shall be able to 
avail itself freely of the products of other industries is a 
prime condition of its successful prosecution. Hardly 
less important is the existence of related industries, 
which aid in economizing material and utilizing waste, 
or make easier the procurement of supplies or services, 
or the sale and distribution of products. This is the 
reason why the more elaborate industries tend within 
certain limits to localization, so that we find a particular 
district, without any assignable reason of soil, climate, 
material productions, or character of the people, become 
noted for a particular manufacture, while different places 
within that district become noted for different branches. 
Thus, in those parts of Massachusetts where the manu- 
facture of boots and shoes is largely carried on, distinc- 
tions such as those between pegged and sewed goods, 
men's and women's wear, coarse and fine, will be found 
to characterize the industry of different towns. And in 
any considerable city we may see the disposition of 
various industries, with their related industries, to 
cluster together. 

But with this tendency to localization there is also a 
tendency which causes industries to arise in their order 
wherever population increases. This tendency is due 
not only to the difficulty and cost of transportation, 
but to differences in taste and to the individuality of 
demands. For instance, it will be much more conve- 
nient and satisfactory to me, if I wish to have a boat bmlt, 
to have it built where I can talk with the builder and 



160 PROTECTION OR FREE TRADE T 

watch its construction ; or to have a coat made where I 
can try it on; or to have a book printed where I can 
readily read the proofs and consult with the printer. 
Further than this, that relation of industries which 
makes the existence of certain industries conduce to the 
economy with which others can be carried on, not merely 
causes the growth of one industry to prepare the way for 
others, but to promote their establishment. 

Thus the development of industry is of the nature of 
an evolution, which goes on with the increase of population 
and the progress of society, the simpler industries coming 
first and forming a basis for the more elaborate ones. 

The reason that newly settled countries do not manu- 
facture is that they can get manufactured goods cheaper 
— that is to say, with less expenditure of labor — than by 
manufacturing them. Just as the farmer, though he 
may have ash and hickory growing on his place, finds it 
cheaper to buy a wagon than to make one, or to take his 
wagon to the wheelwright's when it wants repairing, 
rather than attempt the job himself, so in a new and 
sparsely settled country it may take less labor to obtain 
goods from long distances than to manufacture them, 
even when every natural condition for their manufac- 
ture exists. The conditions for profitably carrying on 
any manufacturing industry are not merely natural con- 
ditions. Even more important than climate, soil and 
mineral deposits are the existence of subsidiary industries 
and of a large demand. Manufacturing involves the 
production of large quantities of the same thing. The 
development of skill, the use of machinery and of 
improved processes, become possible only as large quan- 
tities of the same product are required. If the small 
quantities of all the various things needed must be pro- 
duced for itself by each small community, they can be 
produced only by rude and wasteful methods. But if 



THE DEVELOPMENT OF MANUFACTURES. 161 

trade permits these things to be produced in large quan- 
tities the same labor becomes much more effective, and 
all the various wants can be much better supplied. 

The rude methods of savages are due less to ignorance 
than to isolation. A gun and ammunition will enable a 
man to kUl more game than a bow and arrows, but a 
man who had to make his own weapons from the mate- 
rials furnished by nature, could hardly make himself a 
gun in a lifetime, even if he understood gun-making. 
Unless there is a large number of men to be supplied 
with guns and ammunition, and the materials of which 
these are made can be produced with the economy that 
comes with the production of large quantities, the most 
effective weapons, taking into account the labor of pro- 
ducing them, are bows and arrows, not firearms. With 
a steel ax a tree may be felled with much less labor than 
with a stone ax. But a man who must make his own 
ax would be able to fell many trees with a stone ax in 
the time he would spend trying to make a steel ax from 
the ore. We smile at the savages who for a sheath-knife 
or copper kettle gladly give many rich furs. Such arti- 
cles are with us of little value, because being made in 
large quantities the expenditure of labor required for 
each is very small, but if made in small quantities, as the 
savage would have to make them, the expenditure of 
labor would far exceed that needed to obtain the furs. 
Even if they had the fullest knowledge of the tools and 
methods of civilized industry, men isolated as savages 
are isolated, would be forced to resort to the rude tools 
and methods of savages. The great advantage which 
civilized men have over savages in settling among them, 
is in the possession of tools and weapons made in that 
state of society in which alone it is possible to manu- 
facture them, and that by keeping up communication 
with the denser populations they have left behind them, 



162 PROTECTION OR FREE TRADE? 

the settlers are able by means of trade to avail them- 
selves of the manufacturing advantages of a more fully 
developed society. If the first American colonists had 
been unable to import from Europe the goods they 
required, and thus to avail themselves of the fuller 
development of European industry, they must soon have 
been reduced to savage tools and weapons. And this 
would have happened to all new settlements in the west- 
ward march of our people had they been cut off from 
trade with larger populations. 

In new countries the industries that yield the largest 
comparative returns are the primary or extractive indus- 
tries which obtain food and the raw materials of manu- 
facture from nature. The reason of this is that in these 
primary industries there are not required such costly 
tools and appliances, nor the cooperation of so many 
other industries, nor yet is production in large quantities 
so important. The people of new countries can therefore 
get the largest return for their labor by applying it to 
the primary or extractive industries, and exchanging 
their products for those of the more elaborate industries 
that can best be carried on where population is denser. 

As population increases, the conditions under which 
the secondary or any more elaborate industries can be 
carried on gradually arise, and such industries will be 
established— those for which natural conditions are pecu- 
liarly favorable, and those whose products are in most 
general demand and will least bear transportation, com- 
ing first. Thus in a country having fine forests, manu- 
factures of wood will arise before manufactures for 
which there is no special advantage. The making of 
bricks will precede the making of china, the manufacture 
of plowshares that of cutlery, window-glass wiU be made 
before telescope lenses, and the coarser grades of cloth 
before the finer. 



THE DEVELOPMENT OF MANUFACTURES. 163 

But while we may describe in a general way the condi- 
tions which determine the natural order of industry, yet 
so many are these conditions and so complex are their 
actions and reactions upon one another that no one can 
predict with any exactness what in any given community 
this natural order of development will be, or say when it 
becomes more profitable to manufacture a thing than to 
import it. Legislative interference, therefore, is sure to 
prove hurtful, and such questions should be left to the 
unfettered play of individual enterprise, which is to the 
community what the unconscious vital activities are to 
the man. If the time has come for the establishment of 
an industry for which proper natural conditions exist, 
restrictions upon importation in order to promote its 
establishment are needless. If the time has not come, 
such restrictions can only divert labor and capital from 
industries in which the return is greater, to others in 
which it must be less, and thus reduce the aggregate 
production of wealth. Just as it is evident that to pre- 
vent the people of a new colony from importing from 
countries of fuUer industrial development would deprive 
them of many things they could not possibly make for 
themselves, so it is evident that to restrict importations 
must retard the symmetrical development of domestic 
industries. It may be that protection applied to one or 
to a few industries may sometimes hasten their develop- 
ment at the expense of the general industrial growth; 
but when protection is indiscriminately given to every 
industry capable of protection, as it is in the United 
States, and as is the inevitable tendency wherever pro- 
tection is begun, the result must be to check not merely 
the general development of industry, but even the de- 
velopment of the very industries for whose benefit 
the system of protection is most advocated, by making 
more costly the products which they must use and 



164 PROTECTION OR FREE TRADE? 

repressing the correlative industries with which they 
interlace. 

To assume, as protectionists do, that economy must 
necessarily result from bringing producer and consumer 
together in point of space,* is to assume that things can 
be produced as well in one place as in another, and that 
difficulties in exchange are to be measured solely by 
distance. The truth is, that commodities can often be 
produced in one place with so much greater facility than 
in another that it involves a less expenditure of labor to 
bring them long distances than to produce them on the 
spot, while two points a hundred miles apart may be 
commercially nearer each other than two points ten 
miles apart. To bring the producer to the consumer in 
point of distance, is, if it increases the cost of production, 
not economy but waste. 

But this is not to deny that trade as it is carried on 
to-day does involve much unnecessary transportation, 
and that producer and consumer are in many cases need- 
lessly separated. Protectionists are right when they 
point to the wholesale exportation of the elements of 
fertility of our soil, in the great stream of breadstuffs 
and meats which pours across the Atlantic, as reckless 
profligacy, and fair traders are right when they deplore 
the waste involved in English importations of food while 
English fields are going out of cultivation. Both are 
right in sajdng that one country ought not to be made a 
" draw farm " for another, and that a true economy of the 
powers of nature would bring factory and field closer 
together. But they are wrong in attributing these evils 
to the freedom of trade, or in supposing that the remedy 

* Protectionist arguments frequently involve the additional 
assumption that the "home producer" and "home consumer" are 
necessarily close together in point of space, whereas, as in the 
United States, they may be thousands of miles apart. 



THE DEVELOPMENT OP MANUFACTURES. 165 

Kes in protection. That tariffs are powerless to remedy 
these evils may be seen in the fact that this exhausting 
exportation goes on in spite of our high protective tariff, 
and that internal trade exhibits the same features. 
Everywhere that modern civilization extends, and with 
greatest rapidity where its influences are most strongly 
felt, population and wealth are concentrating in huge 
towns and an exhausting commerce flows from country 
to city. But this ominous tendency is not natural, and 
does not arise from too much freedom ; it is unnatural, 
and arises from restrictions. It may be clearly traced to 
monopolies, of which the monopoly of material opportu- 
nities is the first and most important. In a word, the 
Roman system of landownership, which in our modem 
civilization has displaced that of our Celtic and Teutonic 
ancestors, is producing the same effect that it did in the 
Roman world— the engorgement of the centers and the 
impoverishment of the extremities. WhUe London and 
New York grow faster than Rome ever did, English 
fields are passing out of cultivation as did the fields of 
Latium, and in Iowa and Dakota goes on the exhausting 
culture that impoverished the provinces of Africa. The 
same disease which rotted the old civilization is exhibit- 
ing its symptoms in the new. That disease cannot be 
cured by protective tariffs. 



CHAPTER XVn. 

PROTECTION AND PRODUCERS. 

THE primary purpose of protection is to encourage 
producers*— that is to say, to increase the profits of 
capital engaged in certain branches of industry. 

The protective theory is that the increase a protective 
duty causes in the price at which an imported commodity 
can be sold within the country, protects the home pro- 
ducer {i.e., the man on whose account commodities are 
produced for sale) from foreign competition, so as to 
encourage him by larger profits than he could otherwise 
get to engage in or increase production. All the bene- 
ficial effects claimed for protection depend upon its effect 
in thus encouraging the employing producer, just as all 
the effects produced by the motion of an engine upon the 
complicated machinery of a factory are dependent upon 
its effect in turning the main driving-wheel. The main 
driving-wheel (so to speak) of the protective theory is that 
protection increases the profits of the protected producer. 

But when, assuming this, the opponents of protection 
represent the whole class of protected producers as grow- 

* For want of a better term I have here used the word "pro- 
ducers " in that limited sense in which it is applied to those who 
control capital and employ labor engaged in production. The 
industries protected by our tariff are (with perhaps some nominal 
exceptions) of the kind carried on in this way. 

166 



PBOTECnON AND PRODUCERS. 167 

ing ricli at the expense of their fellow-citizens, they are 
contradicted by obvious facts. Business men well know 
that in our long-protected industries the margin of profit 
is as small and the chances of failure as great as in any 
others— if, in fact, those protected industries are not 
harder to win success in by reason of the more trying 
fluctuations to which they are subject. 

The reason why protection in most cases thus fails to 
encourage is not diflBcult to see. 

The cost of any protective duty to the people at large is 
(1), the tax collected upon imported goods, plus the profits 
upon the tax, plus the expense and profits of smuggling 
in all its forms; plus the expense of sometimes trying 
smugglers of the coarser sort, and occasionally sending 
a poor and friendless one to the penitentiary ; plus bribes 
and moieties received by government officers; and (2), 
the additional prices that must be paid for the products 
of the protected home industry. 

It is from this second part alone that the protected 
industry can get its encouragement. But only a part of 
this part of what the people at large pay is real encour- 
agement. In the first place, it is true of protective 
duties, as it is true of direct subsidies, that they cannot 
be had for nothing. Just as the Pacific Mail Steamship 
Company and the various land- and bond-grant railways 
had to expend large sums to secure representation at 
Washington, and had to divide handsomely with the 
Washington lobby, so the cost of securing Congres- 
sional "recognition" for an infant industry, or fighting 
off threatened reductions in its "encouragement," and 
looking after every new tariff biU, is a considerable item. 
But still more important is the absolute loss in carrying 
on industries so unprofitable in themselves that they can 
be maintained only by subsidies. And to this loss must 
be added the waste that seems inseparable from govern- 



168 PROTECTION OR FREE TRADE? 

mental fosterage, for just in proportion as industries are 
sheltered from competition are they slow to avail them- 
selves of improvements in machinery and methods.* 
Out of the encouragement which the tariff beneficiaries 
receive in higher prices, much must thus be consumed, so 
that the net encouragement is only a small fraction of 
what consumers pay. Taking encouraged producers and 
taxed consumers together there is an enormous loss. 
Hence in all cases in which duties are imposed for the 
benefit of any particular industry the discouragement to 
industry in general must be greater than the encourage- 
ment of the particular industry. So long, however, as 
the one is spread over a large surface and the other over 
a small surface, the encouragement is more marked than 
the discouragement, and the disadvantage imposed on 
all industry does not much affect the few subsidized 
industries. 

But to introduce a tariff bill into a congress or parlia- 
ment is like throwing a banana into a cage of monkeys. 
No sooner is it proposed to protect one industry than 
all the industries that are capable of protection begin to 
screech and scramble for it. They are, in fact, forced to 
do so, for to be left out of the encouraged ring is neces- 
sarily to be discouraged. The result is, as we see in the 

* This disposition is, of course, largely augmented by the greater 
cost of machinery under our protective tariff, which not only 
increases the capital required to begin, but makes the constant 
discarding of old machinery and purchase of new, required to keep 
up with the march of invention, a much more serious matter. Cases 
have occurred in which British manufacturers, compelled by com- 
petition to adopt the latest improvements, have actually sold their 
discarded machinery to be shipped to the United States and used by 
protected Americans. It was his coming across a case of this kind 
that led David A. Wells, when he visited Europe as Special Com- 
missioner of Revenue, to begin to question the usefulness of our 
tariff in promoting American industry. 



PROTECTION AND PRODUCERS. 169 

United States, that they all get protected, some more 
and some less, according to the money they can spend 
and the political influence they can exert. Now every 
tax that raises prices for the encouragement of one 
industry must operate to discourage all other industries 
into which the products of that industry enter. Thus a 
duty that raises the price of lumber necessarily discour- 
ages the industries which make use of lumber, from those 
connected with the building of houses and ships to those 
engaged in the making of matches and wooden tooth- 
picks; a duty that raises the price of iron discourages 
the innumerable industries into which iron enters; a 
duty that raises the price of salt discourages the dairy- 
man and the fisherman ; a duty that raises the price of 
sugar discourages the fruit-preserver, the maker of 
syrups and cordials, and so on. Thus it is evident that 
every additional industry protected lessens the encour- 
agement of those already protected. And since the net 
encouragement that tariff beneficiaries can receive as a 
whole is very much less than the aggregate addition to 
prices required to secure it, it is evident that the point at 
which protection will cease to give any advantage to the 
protected must be much short of that at which every one 
is protected. To illustrate : Say that the total number 
of industries is one hundred, of which one-half are 
capable of protection. Let us say that of what the pro- 
tection costs, one-fourth is realized by the protected 
industries. Then (presuming equality), as soon as twenty- 
five industries obtain protection, the protection can be of 
no benefit even to them, while, of course, involving a 
heavy discouragement to all the rest. 

I use this illustration merely to show that there is a 
point at which protection must cease to benefit even the 
industries it strives to encourage, not that I think it 
possible to give numerical exactness to such matters. 



170 PROTECTION OR FREE TRADEt 

But that there is such a point is certain, and that in the 
United States it has been reached and passed is also cer- 
tain. That is to say, not only is our protective tariff a 
dead-weight upon industry generally, but it is a dead- 
weight upon the very industries it is intended to stimu- 
late. 

If there are producers who permanently profit by pro- 
tective duties, it is only because they are in some other 
way protected from domestic competition, and hence the 
profit which comes to them by reason of the duties does not 
come to them as producers but as monopolists. That is 
to say, the only cases in which protection can more than 
temporarily benefit any class of producers are cases in which 
it cannot stimulate industry. For that neither duties nor 
subsidies can give any permanent advantage in any busi- 
ness open to home competition results from the tendency 
of profits to a common level. The risk to which pro- 
tected industries are exposed from changes in the tariff 
may at times keep profits in them somewhat above the 
ordinary rate ; but this represents not advantage, but the 
necessity for increased insurance, and though it may 
constitute a tax upon consumers does not operate to 
extend the industry. This element of insurance elimi- 
nated, profits in protected industries can be kept above 
those of unprotected industries only by some sort of 
monopoly which shields them from home competition as 
the tariff does from foreign competition. The first effect 
of a protective duty is to increase profits in the protected 
industry. But unless that industry be in some way 
protected from the infiux of competitors which such 
increased profits must attract, this influx must soon 
bring these profits to the general level. A monopoly, 
more or less complete, which may thus enable certain 
producers to retain for themselves the increased profits 
which it is the first effect of a protective duty to give, 



PROTECTION AND PRODUCEBa 171 

may arise from the possession of advantages of different 
kinds. 

It may arise, in the first place, from the possession of 
some peculiar natural advantage. For instance, the only 
chrome-mines yet discovered in the United States, 
belonging to a single family, that family have been 
much encouraged by the higher prices which the protec- 
tive duty on chrome has enabled them to charge home 
consumers. In the same way, until the discovery of 
new and rich copper deposits in Arizona and Montana 
the owners of the Lake Superior copper-mines were 
enabled to make enormous dividends by the protective 
duty on copper, which, so long as home competition was 
impossible, shut out the only competition that could 
reduce their profits, and enabled them to get three or 
four cents more per pound for the copper they sold in 
the United States than for the copper they shipped to 
Europe. 

Or a similar monopoly may be obtained by the posses- 
sion of exclusive privileges given by the patent laws. 
For instance, the combination based on patents for 
making steel have, since home competition with them 
was thus shut out, been enabled, by the enormous duty 
on imported steel, to add most encouragingly to their 
dividends, and the owners of the patented process used 
in making paper from wood have been similarly encour- 
aged by the duty on wood-pulp. 

Or again, a similar monopoly may be secured by the 
concentration of a business requiring large capital and 
special knowledge, or by the combination of producers 
in a "ring" or "pool" so as to limit home production 
and crush home competition. For instance, the protec- 
tive duty on quinine, untU its abolition in 1879, resulted 
to the sole benefit of three houses, while a combination of 
quarry-owners— the Producers' Marble Company— have 



172 PROTECTION OR FREE TRADEt 

succeeded in preventing any home competition in the pro- 
duction of marble, and are thus enabled to retain to 
themselves the higher profits which the protective duty 
on foreign marble makes possible, and largely to concen- 
trate in their own hands the business of working up 
marble. 

But the higher profits thus obtained in no way encour- 
age the extension of such industries. On the contrary, 
they result from the very conditions natural or artificial 
which prevent the extension of these industries. They 
are, in fact, not the profits of capital engaged in industry, 
but the profits of ownership of natural opportunities, of 
patent rights, or of organization or combination, and 
they increase the value of ownership in these opportu- 
nities, rights and monopolistic combinations, not the 
returns of capital engaged in production. Though they 
may go to individuals or companies who are producers, 
they do not go to them as producers ; though they may 
increase the income of persons who are capitalists, they 
do not go to them by virtue of their employment of capi- 
tal, but by virtue of their ownership of special privileges. 

Of the monopolies which thus get the benefit of profits 
erroneously supposed to go to producers, the most impor- 
tant are those arising from the private ownership of 
land. That what goes to the landowner in no wise 
benefits the producer we may readily see. 

The two primary factors of production, without which 
nothing whatever can be produced, are land and labor. 
To these essential factors is added, when production 
passes beyond primitive forms, a third factor, capital— 
which consists of the product of land and labor (wealth) 
used for the purpose of facilitating the production of 
more wealth. Thus to production as it goes on in civi- 
lized societies the three factors are land, labor and 
capital, and since land is in modem civilization made a 



PEOTECTION AND PRODUCERS. 173 

subject of private ownership, the proceeds of production 
are divided between the landowner, the labor-owner, 
and the capital-owner. 

But between these factors of production there exists 
an essential difference. Land is the purely passive 
factor; labor and capital are the active factors— the 
factors by whose application and according to whose 
application wealth is brought forth. Therefore, it is 
only that part of the produce which goes to labor and 
capital that constitutes the reward of producers and 
otimulates production. The landowner is in no sense a 
producer— he adds nothing whatever to the sum of pro- 
ductive forces, and that portion of the proceeds of 
production which he receives for the use of natural 
opportunities no more rewards and stimulates pro- 
duction than does that portion of their crops which 
superstitious savages might bum up before an idol in 
thank-offering for the sunlight that had ripened them. 
There can be no labor until there is a man ; there can be 
no capital until man has worked and saved; but land 
was here before man came. To the production of com- 
modities the laborer furnishes human exertion ; the capi- 
talist furnishes the residts of human exertion embodied 
in forms that may be used to aid further exertion ; but 
the landowner furnishes— what ? The superficies of the 
earth? the latent powers of the soil? the ores beneath it? 
the rain? the sunshine? gravitation? the chemical afl&ni- 
ties? What does the landowner furnish that involves 
any contribution from him to the exertion required in 
production ? The answer must be, nothing ! And hence 
it is that what goes to the landowner out of the results 
of production is not the reward of producers and does 
not stimulate production, but is merely a toU which 
producers are compelled to pay to one whom our laws 
permit to treat as his own what Nature furnishes. 



174 PROTECTION OB FREE TRADE! 

Now, keeping these principles in mind, let us turn to 
the effects of protection. Let us suppose that England 
were to do as the English agriculturist landlords are 
very anxious to have her do— go back to the protective 
policy and impose a high duty on grain. This would 
much increase the price of grain in England, and its first 
effect would be, while seriously injuring other industries, 
to give much larger profits to English farmers. This 
increase of profits would cause a rush into the business 
of farming, and the increased competition for the use of 
agricultural land would raise agricultural rents, so that 
the result would be, when industry had readjusted itself, 
that though the people of England would have to pay 
more for grain, the profits of grain-producing would not 
be larger than profits in any other occupation. The only 
class that would derive any benefit from the increased 
price that the people of England would have to pay for 
their food would be the agricultural landowners, who 
are not producers at all. 

Protection cannot add to the value of the land of a 
country as a whole, any more than it can stimulate 
industry as a whole ; on the contrary, its tendency is to 
check the general increase of land values by checking 
the production of wealth ; but by stimulating a particular 
form of industry it may increase the value of a particular 
kind of land. And it is instructive to observe this, for it 
largely explains the motive in urging protection, and 
where its benefits go. 

For instance, the duty on lumber has not been asked 
for and lobbied for by the producers of lumber— that is 
to say, the men engaged in cutting down and sawing up 
trees, and who derive their profits solely from that 
source— nor has it added to their profits. The parties 
who have reaUy lobbied and logrolled for the imposition 



PEOTECTION AND PRODUCERS. 175 

and maintenance of the lumber duty are the owners of 
timber lands, and its effect has been to increase the price 
of " stumpage," the royalty which the producer of lumber 
must pay to the owner of timber land for the privilege of 
cutting down trees. A certain class of forestallers have 
made a business of getting possession of timber lands by 
aU the various "land-grabbing" devices as soon as the 
progress of population promised to make them available. 
Constituting a compact and therefore powerful interest 
(three parties in Detroit, for instance, are said to own -^ 
of the timber lands in the great timber State of Michi- 
gan), they have been able to secure a duty on lumber, 
which, nominally imposed for the encouragement of the 
lumber producer, has really encouraged only the timber- 
land forestaller, who, instead of being a producer at all, 
is merely a blackmailer of production.* 

So it is with many other duties. The effect of the 
sugar duty, for instance, is to increase the value of sugar 
lands in Louisiana, and our treaty with the Hawaiian 
Islands, by which Hawaiian sugar is admitted free of 
this duty, being equivalent (since the production of 
Hawaiian sugar is not sufficient to supply the United 
States) to the payment of a heavy bounty to Hawaiian 
sugar-growers, has enormously increased the value of 
sugar lands in the Hawaiian Islands. So with the duty 
on copper and copper ore, which for a long time enabled 
American copper companies to keep up the price of 
copper in the United States while they were shipping 



* When, after the great fire in Chicago, a bill was introduced in 
Congress permitting the importation free of duty of materials 
intended for use in the rebuilding of that city, the Michigan timber- 
land barons went to Washington in a special car and induced the 
committee to omit lumber from the bill. 



176 PROTECTION OR FREE TRADE! 

copper to Europe and selling it there at a considerably 
lower price.* The benefit of these duties went to com- 
panies engaged in producing copper, but it went to them 
not as producers of copper but as owners of copper- 
mines. If, as is largely the case in coal- and iron-mining, 
the work had been carried on by operators who paid a roy- 
alty to the mine-owners, the enormous dividends would 
have gone to the mine-owners and not to the operators. 

Horace Greeley used to think that he conclusively dis- 
proved the assertion that the duties on iron were enriching 
a few at the expense of the many, when he declared that 
our laws gave to no one any special privilege of making 
iron, and asked why, if the tariff gave such enormous 
profits to iron producers as the free traders said it did, 
these free traders did not go to work and make iron. So 
far as concerned those producers who derived no special 
advantage from patent rights or combinations, Mr. 
Greeley was right enough— the fact that there was no 
special rush to get into the business proving that iron 
producers as producers were making on the average no 
more than ordinary profits. And could iron be made 
from air, this fact would have shown what Mr. Greeley 
seems to have imagined it did, though it would not have 

* A striking illustration of the way American industry has been 
encouraged by a duty which enabled the stockholders in a couple of 
copper-mines to pay dividends of over a hundred per cent, is 
afforded by the following case : Some years ago a Dutch ship arrived 
at Boston having in her hold a quantity of copper with which her 
master proposed to have her resheathed in Boston. But learning 
that in this " land of liberty " he would not be permitted to take the 
copper from the inside of his ship and employ American mechanics 
to nail it on the outside, without paying a duty of forty-five per 
cent, on the new copper put on, as well as a duty of four cents per 
pound on the old copper taken off, he found it cheaper to sail in 
ballast to Halifax, get his ship re-coppered by Canadian workmen, 
and then come back to Boston for his return cargo. 



PROTECTION AND PRODUCERS. 177 

shown tliat the nation was not losing greatly by the 
duty. But iron cannot be made from air ; it can only 
be made from iron ore. And though Nature, especially 
in the United States, has provided abundant supplies of 
iron ore, she has not distributed them equally, but has 
stored them in large deposits in particular places. If 
inclined to take Horace Greeley's advice to go and make 
iron, should I think its price too high, I must obtain 
access to one of these deposits, and that a deposit suffi- 
ciently near to other materials and to centers of popula- 
tion. I may find plenty of such deposits which no one is 
using, but where can I find such a deposit that is free to 
be used by me ? 

The laws of my country do not forbid me from mak- 
ing iron, but they do allow individuals to forbid me from 
making use of the natural material from which alone 
iron can be made— they do allow individuals to take 
possession of these deposits of ore which Nature has 
provided for the making of iron, and to treat and hold 
them as though they were their own private property, 
placed there by themselves and not by God. Conse- 
quently these deposits of iron ore are appropriated as 
soon as there is any prospect that any one will want to 
use them, and when I find one that will suit my purpose 
I find that it is in the possession of some owner who will 
not let me use it until I pay him down in a purchase 
price, or agree to pay him in a royalty of so much per ton, 
nearly, if not quite, all I can make above the ordinary 
return to capital in producing iron. Thus, while the 
duty which raises the price of iron may not benefit 
producers, it does benefit the dogs in the manger whom 
our laws permit to claim as their own the stores which 
eons before man appeared were accumulated by Nature 
for the use of the millions who would one day be called 
into being— enabling the monopolists of our iron land to 



178 PROTECTION OR FREE TRADE? 

levy heavy taxes on their fellow-citizens long before they 
could otherwise have done so.* So with the duty on 
coal. It adds nothing to the profits of the coal operator 
who buys the right to take coal out of the earth, but it 
does enable a ring of coal-land- and railway-owners to 
levy in many places an additional blackmail upon the use 
of Nature's bounty. 

The motive and effect of many of our duties are well 
illustrated by the import duty we levy on borax and 
boracic acid. We had no duties on borax and boracic 
acid (which have important uses in many branches of 
manufacture) until it was discovered that in the State of 
Nevada Nature had provided a deposit of nearly pure 
borax for the use of the people of this continent. This 
free gift of the Almighty having been reduced to private 
ownership, in accordance with the laws of the United 
States for such cases made and provided, the enterpris- 
ing forestallers at once applied to Congress for (and of 
course secured) the imposition of a duty which would 

• The royalty paid by iron-miners for the privilege of taking the 
ore out of the earth in many cases equals and in some eases exceeds 
the cost of mining it. The royalties of the Pratt Iron and Coal 
Company of Alabama are said to run as high as $10,000 per acre. 
In the Chicago Inter-Ocean, a stanch protectionist paper, of Octo- 
ber 11, 1885, 1 find a description of the Colby Iron-Mine at Bessemer, 
Mich. This mine, it is said, is owned by parties who got it for 
$1.25 per acre. They lease the privilege of taking out ore on a 
royalty of 40 cent* per ton to the Colbys, who sub-lease it to Morse 
& Co. for 52^ cents per ton royalty, who have a contract with Cap- 
tain Sellwood to put the ore on the cars for 87^ cents per ton. Sell- 
wood sub-lets this contract for 12^ cents per ton, and the sub-con- 
tractors are said to make a profit of 2| cents per ton, as the work is 
done by a steam-shovel. Deducting transportation, etc., the ore 
brings $2.80 per ton, as mined, of which only 12^ cents goes to the 
firm who do the actual work of production. The output is 1200 
tons per day, which, according to the Inter-Ocean correspondent, 
gives to the owners a net profit of $480 per day ; to the Colbys, $150 
per day; Morse & Co., $1680; Captain Sellwood, $90 per day; and 



PROTECTION AND PRODUCERS. 179 

make "borax artificially dear and increase the profits of 
this monopoly of a natural advantage. 

While our manufacturers and other producers have 
been caught readily enough with the delusive promise 
that protection would increase their profits, and have 
used their influence to institute and maintain protective 
duties, I am inclined to think that the most efficient 
interest on the side of protection in the United States 
has been that of those who have possessed themselves of 
lands or other natural advantages which they hoped pro- 
tection would make more valuable. For it has been not 
merely the owners of coal, iron, timber, sugar, orange, 
or wine lands, of salt-springs, borax lakes, or copper 
deposits, who have seen in the shutting out of foreign 
competition a quicker demand and higher value for 
their lands, but the same feeling has had its influence 
upon the holders of city and village real estate, who, 
realizing that the establishment of factories or the work- 
ing of mines in their vicinity would give value to their 

the sub-contractors who do the work of mining, $30 per day, "a total 
net profit from the mine, over and above what profit there may be 
in the labor, of $2430 per day." The account concludes by saying: 
"As the product will be at least doubled during the coming year, 
you see there will be some fortunes made out of the Colby mine." 
To these fortunes our protective duty on foreign ore undoubtedly 
contributes, but how much does it in this case encourage production? 
In Lebanon County, Pennsylvania, is a hill of magnetic iron ore 
nearly pure, which has merely to be quarried out. It is owned by 
the Coleman heirs, and has made them so enormously wealthy that 
these are said by some to be the richest people in the United States. 
They are producers of iron, smelting their own ore, as well as rail- 
way-owners and farmers, owning and cultivating by superintendents 
great tracts of valuable land. They, doubtless, have been much 
encouraged by the duty on iron which we have maintained for " the 
protection of American labor," but this encouragement comes to 
them as owners of this rich gift of Nature to— Mr. Coleman's heirs. 
The deposit of iron ore would be worked were there no duty, and 
was worked, I believe, before any duty on iron was imposed. 



180 PROTECTION OR FREE TRADE? 

lots, have been disposed to support a policy which had 
for its avowed object the transfer of such industries 
from other countries to our own. 

To repeat: It is only at first that a protective duty 
can stimulate an industry. When the forces of produc- 
tion have had time to readjust themselves, profits in the 
protected industry, unless kept up by obstacles which 
prevent further extension of the industry, must sink to 
the ordinary level, and the duty losing its power of 
further stimulation ceases to yield any advantage to 
producers unprotected against home competition. This 
is the situation of the greater part of "protected" 
American producers. They feel the general injury of 
the system without really participating in its special 
benefits. 

How, then, it may be asked, is it that even these pro- 
ducers who are not sheltered by any home protection are 
in general so strongly in favor of a protective tariff? 
The true reason is to be found in the causes I will here- 
after speak of, which predispose the common mind to an 
acceptance of protective ideas. And, while keen enough 
as to their individual interests, these producers are as 
bHnd to social interests as any other class. They have 
so long heard and been accustomed to repeat, that free 
trade would ruin American industry, that it never occurs 
to them to doubt it; and the effect of duties upon so 
many other products being to enhance the cost of their 
own productions, they see, without apprehending the 
cause, that were it not for the particular duty that pro- 
tects them they could be undersold by foreign products, 
and so they cling to the system. Protection is necessary 
to them in many cases, because of the protection of other 
industries. But were the whole system abolished there 
can be no doubt that American industry would spring 
forward with new vigor. 



CHAPTER XVm. 

EFFECTS OF PROTECTION ON AMERICAN INDUSTRT. 

IF there is one country in the world where the assump- 
tion that protection is necessary to the development 
of manufactures and the "diversification of industry" 
is conclusively disproved by the most obvious facts, that 
country is the United States. The first settlers in 
America devoted themselves to trade with the Indians 
and to those extractive industries which a sparse popula- 
tion always finds most profitable, the produce of the 
forest, of the soil, and of the fisheries, constituting their 
staples, while even bricks and tiles were at first imported 
from the mother country. But without any protection 
and in spite of British regulations intended to prevent 
the growth of manufactures in the colonies, one industry 
after another took root, as population increased, until at 
the time of the first Tariff Act, in 1789, all the more 
important manufactures, including those of iron and 
textiles, had become firmly established. As up to this 
time they had grown without any tariff, so must they 
have continued to grow with the increase of population, 
even if we had never had a tariff. 

But the American who contends that protection is 
necessary to the diversification of industry must not 
merely ignore the history of his country during that long 
period before the first tariff of any kind was instituted, 

181 



182 PROTECTION OR FREE TRADET 

but he must ignore what has been going on ever since, 
and is still going on under his eyes. 

We need look no further back than the formation of 
the Union to see that if it were true that manufacturing 
could not grow up in new countries without the protec- 
tion of tariffs the manufacturing industries of the United 
States would to-day be confined to a narrow belt along 
the Atlantic seaboard. Philadelphia, New York and 
Boston were considerable cities, and manufactures had 
taken a firm root along the Atlantic, when Western New 
York and Western Pennsylvania were covered with 
forests, when Indiana and Illinois were buffalo-ranges, 
when Detroit and St. Louis were trading-posts, Chicago 
undreamed of, and the continent beyond the Mississippi 
as little known as the interior of Africa is now. In the 
United States, the East has had over the West all the 
advantages which protectionists say make it impossible 
for a new country to build up its manufacturing indus- 
tries against the competition of an older country— larger 
capital, longer experience, and cheaper labor. Yet with- 
out any protective tariff between the West and the East, 
manufacturing has steadily moved westward with the 
movement of population, and is moving westward still. 
This is a fact that of itself conclusively disproves the 
protective theory. 

The protectionist assumption that manufactures have 
increased in the United States because of protective 
tariffs is even more unfounded than the assumption that 
the growth of New York after the building of each new 
theater was because of the bmlding of the theater. It 
is as if one should tow a bucket behind a boat and insist 
that it helped the boat along because she stiU moved for- 
ward. Manufacturing has increased in the United States 
because of the growth of population and the development 
of the country ; not because of tariffs, but in spite of them. 



EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 183 

That protective tariffs have injured instead of helped 
American manufactures is shown by the fact that our 
manufactures are much less than they ought to be, con- 
sidering our population and development — much less 
relatively than they were in the beginning of the cen- 
tury. Had we continued the policy of free trade our 
manufactures would have grown up in natural hardihood 
and vigor, and we should now not only be exporting 
manufactured goods to Mexico and the West Indies, 
South America and Australia, as Ohio is exporting 
manufactured goods to Kansas, Nebraska, Colorado and 
Dakota, but we should be exporting manufactured goods 
to Great Britain, just as Ohio is to-day exporting manu- 
factured goods to Pennsylvania and New York, where 
manufactui-es began before Ohio was settled. But so 
heavily are our manufactures weighted by a tariff which 
increases the cost of aU their materials and appliances, 
that, in spite of our natural advantages and the inven- 
tiveness of our people, our sales are confined to our pro- 
tected market, and we can nowhere compete with the 
manufactures of other countries. In spite of the increase 
of duties with which we have attempted to keep out for- 
eign importations and build up our own manufacturing 
industries, the great bulk of our importations to-day are 
of manufactured goods, while all but a trivial percentage 
of our exports consist of raw materials. Even where we 
import largely from such countries as Brazil, which have 
almost no manufactures of their own, w;e cannot send 
them in return the manufactured goods they want, but 
to pay for what we buy of them must send our raw 
materials to Europe. 

This is not a natural condition of trade. The United 
States have long passed the stage of growth in which 
raw materials constitute the only natural exports. We 
have now a population of nearly sixty millions, and con- 



184 PROTECTION OR FREE TRADE? 

same more manufactured goods than any other nation. 
We possess unrivaled advantages for manufacturing. In 
extent and accessibility our coal deposits far surpass 
those of any other civilized country, while we have reser- 
voirs of natural gas that supply fuel almost without 
labor. Moreover, we are the first of civilized nations in 
the invention and use of machinery, and in the economy 
of material and labor. But all these advantages are 
neutralized by the wall of protection we have built along 
our coasts. 

For as long as I can remember, the protectionist press 
has been from time to time chronicling the fact that con- 
siderable orders for this, that or the other American 
manufacture had been received from abroad, as proving 
that protection was at last beginning to bring about the 
results promised for it, and that American manufacturing 
industry, so safely guarded during its infancy by a pro- 
tective tariff, was now about to enter the markets of the 
world. The statements that have been made the basis 
of these congratulations have generally been true, but 
the predictions founded upon them have never bewi veri- 
fied, and, while our population has doubled, our exports 
of manufactured articles have relatively declined. The 
explanation is this : The higher rates of wages that have 
prevailed in the United States, and the consequent 
higher standard of general intelligence, have stimulated 
American invention, and we are constantly making 
improvements upon the tools, methods and patterns 
elsewhere in use. These improvements are constantly start- 
ing a foreign demand for American manufactures which 
seems to promise large increase. But before this increase 
takes place the improvements are adopted in countries 
where manufacturing is not so heavily burdened by taxes 
on material, and what should have been peculiarly an 
American manufacture is transferred to a foreign country. 



EFFECTS OF PEOTECTION ON AMEEICAN INDUSTRY. 185 

Every American who has visited London has doubtless 
noticed, opposite the Parliament House at Westminster, 
a shop devoted to the sale of "American notions." 
There are a number of such shops in London, and they 
are also to be found in every town of any size iu the 
three kingdoms. These shops must sell ia the aggregate 
quite an amount of American tools and contrivances, 
which in part accounts for the fact that we still export 
some manufactures. But the American will be deluded 
who, from the number of these shops and the interest 
taken by the people who are constantly looking in the 
windows or examining the goods, imagines that Ameri- 
can manufactures are beginning to gain a foothold in 
the Old World. These shops are in fact curiosity-shops, 
just as are the Chinese and Japanese shops that we find 
in the larger American cities, and people go to them to 
see the ingenious things the Americans are getting up. 
But no sooner do these shops so far popularize an 
"American notion" that a considerable demand for it 
arises, than some English manufacturer at once begins 
to make it, or the American inventor, if he holds an 
English patent, finds more profit in manufacturing it 
abroad. Not having the discouragements of American 
protection to contend with, he can make it in Great Brit- 
ain cheaper than in the United States, and the conse- 
quence of the introduction of an American "notion" is 
that, instead of its importation from America increasing, 
it comes to an end. 

This illustrates the history of American manufactures 
abroad. One article after another which has been 
invented or improved in the United States has seemed to 
get a foothold in foreign markets only to lose it when 
fairly introduced. We have sent locomotives to Russia, 
arms to Turkey and Grermany, agricultural implements 
to England, river steamers to China, sewing-machines to 



186 PROTECTION OR FREE TRADE! 

all parts of the world, but have never been able to hold 
the trade our inventiveness should have secured. 

But it is on the high seas and in an industry in which 
we once led the world that the effect of our protective 
policy can be most clearly seen. 

Thirty years ago ship-building had reached such a 
pitch of excellence in this country that we built not only 
for ourselves but for other nations. American ships 
were the fastest sailers, the largest carriers, and every- 
where got the quickest despatch and the highest freights. 
The registered tonnage of the United States almost 
equaled that of Great Britain, and a few years promised 
to give us the unquestionable supremacy of the ocean. 

The abolition of the more important British protective 
duties in 1846 was followed in 1854 by the repeal of the 
Navigation Laws, and from thenceforth not only were 
British subjects free to buy or build ships wherever they 
pleased, but the coasting trade of the British Isles was 
thrown open to foreigners. Dire were the predictions 
of British protectionists as to the utter ruin that was 
thus prepared for British commerce. The Yankees were 
to sweep the ocean, and "half-starved Swedes and Nor- 
wegians " were to drive the " ruddy, beef -eating English 
tar " from his own seas and channels. 

"While one great commercial nation thus abandoned 
protection, the other redoubled it. The breaking out of 
our civil war was the golden opportunity of protection, 
and the unselfish ardor of a people ready to make any 
sacrifice to prevent the dismemberment of their country 
was taken advantage of to pile protective taxes upon 
them. The ravages of Confederate cruisers and the 
consequent high rate of insurance on American ships 
would under any circumstances have diminished our 
deep-sea commerce; yet this effect was only temporary, 
and but for our protective policy we should at the end of 



EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 187 

the war have quickly resumed our place in the carrying 
trade of the world and moved forward to the lead with 
more vigor than ever. 

But crushed by a policy which prevents Americans 
from building, and forbids them to buy ships, our com- 
merce, ever since the war, has steadily shrunk, until 
American ships, which, when we were a nation of twenty- 
five millions, plowed every sea of the globe, are now, 
when we number nearly sixty millions, seldom seen on 
blue water. In Liverpool docks, where once it seemed 
as if every other vessel was American, you must search 
the forests of masts to find one. In San Francisco Bay 
you may count English ship, and English ship, and Eng- 
lish ship, before you come to an American, while five- 
sixths of the foreign commerce of New York is carried 
on in foreign bottoms. Once no American dreamed of 
crossing the Atlantic save on an American ship ; to-day 
no one thinks of taking one. It is the French and the 
Germans who compete with the British in carrying 
Americans to Europe and bringing them back. Once 
our ships were the finest on the ocean. To-day there is 
not a first-class ocean carrier under the American flag, 
and but for the fact that foreign vessels are absolutely 
prohibited from carrying between American ports, ship- 
building, in which we once led the world, would now be 
with us a lost art. As it is, we have utterly lost our 
place. When I was a boy we confidently believed that 
American war-ships could outsail, when they could not 
outfight, anything that fioated, and in the event of war 
with a commercial nation we knew that every sea of the 
globe would swarm with swift American privateers. 
To-day, the ships on which we have wasted millions are, 
for purposes of modem warfare, as antiquated as Roman 
galleys. Compared with the vessels of other nations 
tiiey can neither fight nor runj while, as for privateers 



188 PEOTECTION OR FREE TRADE? 

or chartered vessels, Great Britain could take from those 
greyhounds of the sea which American travel and trade 
support, enough fleet ships to snap up any vessel that 
ventured out of an American port. 

I do not complain of the inefficiency of our navy. The 
maintenance of a navy in time of peace is unworthy of 
the dignity of the Great Republic and of the place she 
should aspire to among the nations, and to my mind the 
hundreds of millions that during the last twenty years 
we have spent upon our navy would have been as truly 
wasted had they secured us good ships. But I do com- 
plain of the decadence in our ability to build ships. Our 
misfortune is not that we have no navy, but that we 
lack the swift merchant fleet, the great foundries and 
ship-yards, the skilled engineers and seamen and me- 
chanics, in which, and not in navies, true power upon 
the seas consists. A people in whose veins runs the 
blood of Vikings have been driven oflE the ocean by— them- 
selves. 

Of course the selfish interests that profit, or imagine 
they profit, by the policy which has swept the American 
flag from the ocean as no foreign enemy could have 
done, ascribe this effect to every cause but the right one. 
They say, for instance, that we cannot compete with 
other nations in ocean commerce, because they have an 
advantage in lower wages and cheaper capital, in wilful 
disregard of the fact that when the difference in wages 
and interest between the two sides of the Atlantic was 
far greater than now we not only carried for ourselves 
but for other nations, and were rapidly rising to the 
position of the greatest of ocean carriers. The truth is, 
that if wages are higher with us this is really to our 
advantage, while not only can capital now be had as 
cheaply in New York as in London, but American capital 
is actually being used to run vessels under foreign flags, 



EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 189 

because of the taxes which make it unprofitable to build 
or run Ameriean vessels. 

De Tocqueville, fifty years ago, was struck with the 
fact that nine-tenths of the commerce between the 
United States and Europe and three-fourths of the 
commerce of the New World with Europe was carried in 
American ships; that these ships filled the docks of 
Havre and Liverpool, while but few English and French 
vessels were to be seen at New York. This, he saw, 
could only be explained by the fact that "vessels of the 
United States can cross the seas at a cheaper rate than 
any other vessels in the world." But, he continues : 

It is difficult to say for what reason the American can trade at a 
lower rate than other nations ; and one is at first sight led to attrib- 
ute this circumstance to the physical or natiiral advantages which 
are within their reach; but this supposition is erroneous. The 
American vessels cost almost as much as our own; they are not 
better built, and they generally last for a shorter time, while the pay 
of the American sailor is more considerable than the pay on board 
European ships. I am of opinion that the true caxise of their superi- 
ority must not be sought for in physical advantages but that it is 
wholly attributable to their moral and intellectual qualities. 

. . . The European sailor navigates with prudence; he only 
sets sail when the weather is favorable ; if an unforeseen accident 
befalls him, he puts into port; at night he furls a portion of his 
canvas; and when the whitening billows intimate the vicinity of 
land, he checks his way and takes an observation of the sea. But 
the American neglects these precautions, and braves these dangers. 
He weighs anchor in the midst of tempestuous gales ; by night and 
by day he spreads his sheets to the wind ; he repairs as he goes along 
such damages as his vessel may have sustained from the storm ; and 
when at last he approaches the term of his voyage he darts onward 
to the shore as if he already descried a port. The Americans are 
often shipwrecked, but no trader crosses the sea so rapidly, and, as 
they perform the same distance in a shorter time, they can perform 
it at a cheaper rate. 

I cannot better explain my meaning than by saying that Hie Ameri- 
can affects a sort of heroism in his manner of trading, in which he 
follows not only a calculation of his gain, but an impulse of his nature. 



190 PROTECTION OR FREE TRADE! 

What the observant Frenchman describes in somewhat 
extravagant language was a real advantage— an advan- 
tage that attached not merely to the sailing of ships, but 
to their designing, their building, and everything con- 
nected with them. And what gave this advantage was 
not anything in American nature that differed from 
other human nature, but the fact that higher wages and 
the resulting higher standard of comfort and better 
opportunities developed a greater power of adapting 
means to ends. In short, the secret of our success upon 
the ocean (as of all our other successes) lay in the very 
things that according to the exponents of protectionism 
now shut us out from the ocean.* 

Again, it is said that it is the substitution of steam for 
canvas and iron for wood that has led to the decay of 

* By way of consolation for the manner in which protectionism 
has driven American ships from the ocean, Professor Thompson 
("Political Economy," p. 216) says: 

" If there were no other reason for the policy that seeks to reduce 
foreign commerce to a minimum, a sufficient one would be found in 
its effect upon the human material it employs. Bentham thought 
the worst possible use that could be made of a man was to hang 
him ; a worse stiU is to make a common saUor of him. The life and 
the manly character of the sailor has been so admired in song and 
prose, and the real excellences of individuals of the profession have 
been made so prominent, that we forget what the mass of this class 
of men are, and what representatives of our civilization and Chris- 
tianity we send out to all lands in the tenants of the forecastle." 

There is some truth in this, but what there is is due to protection- 
ism in its broader sense. There is no reason in the nature of his 
vocation why the sailor should not be as well fed, well paid and well 
treated, as intelligent and self-respecting, as any mechanic. That 
he is not is at bottom due to the paternal interference of maritime 
law with the relations of employer and employed. The law does not 
specifically enforce contracts for services on shore, and for any 
breach of contract by an employee the employer has only a civil 
remedy. He cannot restrain the employed of his liberty, coerce 
him by violence or duress, or, should he qait work, call on the law 



EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 191 

American shipping. This is no more a reason for the 
decay of American shipping than is the substitution of 
the double topsail-yard for the single topsail-yard. 
River steamers were first developed here; it was an 
American steamship that first crossed from New York to 
Liverpool, and thirty years ago American steamers were 
making the "crack" passages. The same skill, the same 
energy, the same facility of adapting means to ends 
which enabled our mechanics to build wooden ships 
would have enabled them to continue to build ships no 
matter what the change in material. With free trade 
we should not merely have kept abreast of the change 
from wood to iron, we should have led it. This we 
should have done even though not a pound of iron could 
have been produced on the whole continent. In the 
glorious days of American ship-building Donald McKay 

to bring him back, and thus the personal relations of employer and 
employed are left to the free play of mutual interest. For services 
requiring vigilance and sobriety, and where great loss or danger 
would result from a sudden refusal to go on with the work, the 
employer must look to the character of the men he employs, and 
must so pay and treat them that there will be no danger of their 
wisliing to leave him. But what on shore is thus left to the self- 
regulative principle of freedom is, as to services to be performed on 
shipboard, attempted to be regulated on the paternal principle of 
protectionism. Here the law steps in to compel the specific per- 
formance of contracts, and not only gives the employer or his 
representative the right to restrain the employed of his personal 
liberty, and by violence or duress to compel his performance of 
services he has contracted for, but if the employed leave the ship 
the law may be invoked to arrest, imprison, and force him back. 
The result has been on the one hand largely to destroy the incentive 
to proper treatment of their crews on the part of owners and masters 
of ships, and on the other to degrade the character of seamen. 
Crews have been largely obtained by a system of virtual impress- 
ment or kidnapping called in longshore vernacular " shanghaing," 
by which men are put on board ship when drunk or even by force, 
for the sake of their advance wages or a bonus called "blood- 



192 PROTECTION OR FREE TRADE? 

of Boston and William H. "Webb of New York drew the 
materials for their white- winged racers from forests that 
were practically almost as far from those cities as they 
were from the Clyde, the Humber, or the Thames. Had 
our ship-builders been as free as their English rivals to 
get their materials wherever they could buy them best 
and cheapest, they could as easily have built ships with 
iron brought from England as they did build them with 
knees from Florida, and planks from Maine and North 
Carolina, and spars from Oregon. Ireland produces 
neither iron nor coal, but BeKast has become noted for 
iron ship-building, and iron can be carried across the 
Atlantic almost as cheaply as across the Irish Sea. 

But so far from its being necessary to bring iron from 
Great Britain, our deposits of iron and coal are larger, 
better, and more easily worked than those of Great Brit- 
ain, and before the Revolution we were actually export- 
ing iron to that country. Had we never embraced the 

money," which the power of keeping the men on board and compel- 
ling them to work enables the ship-owners safely to pay. The 
power that must be intrusted to the master of a ship, on whose skill 
and judgment depends the safety of all on board, is necessarily 
despotic, but while the abuse of this power has, under a system 
which enables a brutal captain to get crews with as much or almost 
as much facility as a humane one, been little checked by motives of 
self-interest, it has been stimulated by the degradation which such 
a system inevitably produces in the character of the crews. Various 
attempts have been made to remedy this state of things ; but nothing 
can avail much that does not go to the root of the difficulty and lead 
the sailor, no matter what contract he may have signed or what 
advances have been paid to or for him, as free to quit a vessel as 
any mechanic on shore is free to quit his employment. Theoret- 
ically the law may guard the rights of one party to a contract as 
well as those of the other ; but practically the poor and uninfluential 
are always at a disadvantage in appealing to the law. This is a vice 
which inheres in all forms of protectionism, from that of absolute 
monarchy to that of protective duties. 



EFFECTS OF PROTECTION ON AMERICAN INDUSTRY. 193 

policy of protection we should to-day have been the first 
of iron producers. The advantage that Great Britain 
has over us is simply that she has abandoned the repres- 
sive system of protection, while we have increased it. 
This difference in policy, while it has enabled the British 
producer to avail himself of the advantages of all the 
world, has handicapped the American producer and 
restricted him to the market of his own country. The 
ores of Spain and Africa which, for some purposes, it is 
necessary to mix with our own ores, have been burdened 
with a heavy duty ; a heavy duty has enabled a great 
steel combination to keep steel at a monopoly price; a 
heavy duty on copper has enabled another combination 
to get a high price for American copper at home, while 
exporting it to Great Britain for a low price; and to 
encourage a single bunting factory the very ensign of an 
American ship has been subjected to a duty of 150 per 
cent. From keelson to truck, from the wire in her stays 
to the brass in her taffrail log, everything that goes to 
the building, the fitting or the storing of a ship is bur- 
dened with heavy taxes. Even should she be repaired 
abroad she must pay taxes for it on her return home. 
Thus has protection strangled an industry in which with 
free trade we might still have led the world. And the 
injury we have done ourselves has been, in some degree 
at least, an injury to mankind. Who can doubt that 
ocean steamers would to-day have been swifter and 
better had American builders been free to compete with 
English builders ? 

Though our Navigation Laws, which forbid the carry- 
ing of a pound of freight or a single passenger from 
American port to American port on any other than an 
American-built vessel, obscure the effects of protection 
in our coasting trade, they are just as tnily felt as in our 
ocean trade. The increased cost of building and running 



194 PROTECTION OR FREE TRADE? 

vessels has, especially as to steamers, operated to stunt 
the growth of our coasting trade, and to check by higher 
freights the development of other industries. And how 
restriction strengthens monopoly is seen in the manner 
in which the effect of protection upon our coastwise 
trade has been to make easier the extortions of railway 
syndicates. For instance, the Pacific Railway pool has 
for years paid the Pacific Mail Steamship Company 
$85,000 a month to keep up its rates of fare and freight 
between New York and San Francisco. It would have 
been impossible for the railway ring thus to prevent 
competition had the trade between the Atlantic and 
Pacific been open to foreign vessels. 



CHAPTER XTX. 

PROTECTION AND WAGES. 

WE have sufficiently seen the effect of protection on 
the production of wealth. Let us now inquire as 
to its effect on wages. This is a question of the distribu- 
tion of wealth. 

Discussions of the tariff question seldom go further 
than the point we have now reached, for though much is 
said, in the United States at least, of the effect of protec- 
tion on wages, it is as a deduction from what is asserted 
of its effect on the production of wealth. Its advocates 
claim that protection raises wages ; but in so far as they 
attempt to prove this it is only by arguments, such as we 
have examined, that protection increases the prosperity 
of a country as a whole, from which it is assumed that it 
must increase wages. Or when the claim that protection 
raises wages is put in the negative form (a favorite 
method with American protectionists) and it is asserted 
that protection prevents wages from falling to the lower 
level of other countries, this assertion is always based on 
the assumption that protection is necessary to enable 
production to be carried on at the higher level of wages, 
and that if it were withdrawn production would so 
decline, by reason of the underselling of home producers 
by foreign producers, that wages must also decline.* 

* Here, for instance, taken from the New York IVibune during 
the last Presidential campaign (1884), is a sample of the arguments 

195 



196 PROTECTION OR FREE TRADE? 

But although its whole basis has already been over- 
thrown, let us (since this is the most important part of 
the question) examine directly and independently the 
claim that protection raises (or maintains) wages. 

Though the question of wages is primarily a question 
of the distribution of wealth, no protectionist writer that 
I know of ventures to treat it as such, and free traders 
generally stop where protectionists' stop, arguing that 
protection must diminish the production of wealth, and 
(so far as they treat the matter of wages) from this 
inferring that protection must reduce wages. For pur- 
poses of controversy this is logically sufficient, since, free 
trade being natural trade, the onus of proof must lie 
upon those who would restrict it. But as my purpose is 
more than that of controversy, I cannot be contented 
with showing merely the unsoundness of the arguments 
for protection. A true proposition may be supported by 
a bad argument, and to satisfy ourselves thoroughly as 
to the effect of protection we must trace its influence on 
the distribution, as well as on the production of wealth. 
Error often arises from the assumption that what benefits 
or injures the whole must in like manner affect all its 

for protection which are manufactured about election-times for the 
consumption of " the intelligent and highly paid American working- 
man " : 

"All workers know that labor in other countries is not paid as 
well as it is here. But this difference could not exist if the products 
of 50-cent labor in England or Germany or Canada could be sold 
freely in our market, instead of the production of $1 labor here. 
Hence, this country compels the employers of the 50-cent labor 
abroad to pay duty for the privilege of selling their goods in this 
market. That duty is called a tariff. If it is made high enough to 
fit the difference in rate of wages, so that labor in this country can- 
not be degraded toward the level of similar labor in other countries, 
it is called a protective tariff. Such a tariff is a defense of Ameiican 
industry against direct competition with the underpaid labor of other 
countries." 



PROTECTION AND WAGES. 197 

parts. Causes which increase or decrease aggregate 
wealth often produce the reverse effect on classes or 
individuals. The resort to salt instead of kelp for 
obtaining soda increased the production of wealth in 
Great Britain, bmt lessened the income of many High- 
land landlords. The introduction of railways, greatly as 
they have added to aggregate wealth, ruined the business 
of many small villages. Out of wars, destructive to 
national wealth though they be, great fortunes arise. 
Fires, floods and famines, while disastrous to the com- 
munity, may prove profitable to individuals, and he who 
has a contract to fill, or who has speculated in stocks for 
a fall, may be enriched by hai-d times. 

As, however, those who live by their labor constitute 
in all countries the large majority of the people, there is 
a strong presumption that no matter who else is bene- 
fited, anything that reduces the aggregate income of the 
community must be injurious to working-men. But that 
we may leave nothing to presumption, however strong, 
let us examine directly the effect of protective tariffs on 
wages. 

Whatever affects the production of wealth may at the 
same time affect distribution. It is also possible that 
increase or decrease in the production of wealth may, 
under certain circumstances, alter the proportions of distri- 
bution. But it is only with the first of these questions 
that we have now to deal, since the second goes beyond 
the question of tariff, and if it shall become necessary to 
open it, that will not be until after we have satisfied 
ourselves as to the tendencies of protection. 

Trade, as we have seen, is a mode of production, and 
the tendency of tariff restrictions on trade is to lessen 
the production of wealth. But protective tariffs also 
operate to alter the distribution of wealth, by imposing 
higher prices on some citizens and giving extra profits to 



198 PROTECTION OR FREE TRADE! 

others. This alteration of distribution in their favor is 
the impelling motive with those most active in procuring 
the imposition of protective duties and in warning work- 
men of the dire calamities that will come on them if such 
duties are repealed. But in what "w&f can protective 
tariffs affect the distribution of wealth in favor of labor ? 
The direct object and effect of protective tariffs is to 
raise the price of commodities. But men who work for 
wages are not sellers of commodities ; they are sellers of 
labor. They sell labor in order that they may buy com- 
modities. How can increase in the price of commodities 
benefit them ? 

I speak of price in conformity to the custom of com- 
paring other values by that of money. But money is 
only a medium of exchange and a measure of the com- 
parative values of other things. Money itself rises and 
falls in value as compared with other things, varying 
between time and time, and place and place. In reality 
the only true and final standard of values is labor— the 
real value of anything being the amount of labor it will 
command in exchange. To speak exactly, therefore, the 
effect of a protective tariff is to increase the amount of 
labor for which certain commodities will exchange. 
Hence it reduces the value of labor just as it increases 
the value of commodities. 

Imagine a tariff that prevented the coming in of 
laborers, but placed no restriction on the coming in of 
commodities. Would those who have commodities to sell 
deem such a tariff for their benefit? Yet to say this 
would be as reasonable as to say that a tariff upon com- 
modities is for the benefit of those who have labor to sell. 

It is not true that the products of lower-priced labor 
will drive the products of higher-priced labor out of any 
market in which they can be freely sold, since, as we 
have already seen, low-priced labor does not mean cheap 



PEOTECTION AND WAGES. 199 

prodnction, and it is the comparative, not the absolute, 
cost of production that determines exchanges. And we 
have but to look around to see that even in, the same 
occupation, wages paid for labor whose products sell 
freely together are generally higher in large cities than 
in smaU towns, in some districts than in others. 

It is true that there is a constant tendency of all wages 
to a common level, and that this tendency arises from 
competition. But this competition is not the competi- 
tion of the goods-market J it is the competition of the 
labor-market. The differences between the wages paid 
in the production of goods that sell freely in the same 
market cannot arise from checks on the competition of 
goods for sale ; but manifestly arises from checks on the 
competition of labor for employment. As the competi- 
tion of labor varies between employment and employ- 
ment, or between place and place, so do wages vary. 
The cost of living being greater in large cities than in 
small towns, the higher wages in the one are not more 
attractive than the lower wages in the other, while the 
differing rates of wages in different districts are mani- 
festly maintained by the inertia and friction which 
retard the flow of population, or by causes, physical or 
social, which produce differences in the intensity of com- 
petition in the labor-market. 

The tendency of wages to a common level is quickest 
in the same occupation, because the transference of labor 
is easiest. There cannot be, in the same place, such 
differences in wages in the same industry as may exist 
between different industries, since labor in the same 
industry can transfer itseK from employer to employer 
with far less difficulty than is involved in changing an 
occupation. There are times when we see one employer 
reducing wages and others following his example, but this 
occurs too quickly to be caused by the competition of the 



200 PROTECTION OR FREE TRADEt 

goods-market. It occurs at times when there is great 
competition in the labor-market, and the same conditions 
which enable one employer to reduce wages enable others 
to do the same. If it were the competition of the goods- 
market that brought wages to a level, they could not be 
raised in one establishment or in one locality unless at 
the same time raised in others that supplied the same 
market ; whereas, at the times when wages go up, we see 
workmen in one establishment or in one locality first 
demanding an increase, and then, if they are successful, 
workmen in other establishments or localities following 
their example. 

If we pass now to a comparison of occupation with 
occupation, we see that although there is a tendency to a 
common level, which maintains between wages in differ- 
ent occupations a certain relation, there are, in the same 
time and place, great differences of wages. These differ- 
ences are not inconsistent with this tendency, but are 
due to it, just as the rising of a balloon and the falling 
of a stone exemplify the same physical law. While the 
competition of the labor-market tends to bring wages in 
all occupations to a common level, there are differences 
between occupations (which may be summed up as differ- 
ences in attraction and differences in the difficulty of 
access) that check in various degrees the competition of 
labor and produce different relative levels of wages. 
Though these differences exist, wages in different occu- 
pations are nevertheless held in a certain relation to each 
other by the tendency to a common level, so that a 
reduction of wages in one trade tends to bring about a 
reduction in others, not through the competition of the 
goods-market, but through that of the labor-market. 
Thus cabinet-makers, for instance, could not long get $2 
where workmen in other trades as easily learned and 
practised were only getting $1, since the superior wages 



PROTECTION AND WAGES. 201 

would so attract labor to cabinet-making as to increase 
competition and bring wages down. But if the cabinet- 
makers possessed a union strong enough strictly to limit 
the number of new workmen entering the trade, is it not 
clear that they could continue to get $2 while in other 
trades similar labor was getting only $1 ? As a matter 
of fact, trades-unions, by checking the competition of 
labor, have considerably raised wages in many occupa- 
tions, and have even brought about differences between 
the wages of union and non-union men in the same occu- 
pation. And what limits the possibility of thus raising 
wages is clearly not the free sale of commodities, but the 
difficulty of restricting the competition of labor. 

Do not these facts show that what American workmen 
have to fear is not the sale in our goods-market of the 
products of "cheap foreign labor," but the transference 
to our labor-market of that labor itself ? Under the con- 
ditions existing over the greater part of the civilized 
world, the minimum of wages is fixed by what econo- 
mists call the " standard of comfort "—that is to say, the 
poorer the mode of life to which laborers are accustomed 
the lower are their wages and the greater is their ability 
to compel a reduction in any labor-market they enter. 
What, then, shall we say of that sort of " protection of 
American working-men" which, while imposing duties 
upon goods, under the pretense that they are made by 
"pauper labor," freely admits the "pauper laborer" 
himself 1 

The incoming of the products of cheap labor is a very 
different thing from the incoming of cheap labor. The 
effect of the one is upon the production of wealth, 
increasing the aggregate amount to be distributed; the 
effect of the other is upon the distribution of wealth, 
decreasing the proportion which goes to the working- 
classes. We might permit the free importation of 



202 PKOTECTION OR FREE TRADE? 

Chinese commodities without in the slightest degree 
affecting wages j but, under our present conditions, the 
free immigration of Chinese laborers would lessen wages. 

Let us imagine under the general conditions of modem 
civilization, one country of comparatively high wages, 
and another country of comparatively low wages. Let 
us, in imagination, bring these countries side by side, 
separating them only by a wall which permits the free 
transmission of commodities, but is impassable for 
human beings. Can we imagine, as protectionist notions 
require, that the high-wage country would do all the 
importing and the low-wage country all the exporting, 
untU the demand for labor so lessened in the one country 
that wages would fall to the level of the other? That 
would be to imagine that the former country would go 
on pushing its commodities through this wall and getting 
back nothing in return. Clearly the one country would 
export no more than it got a return for, and the other 
could import no more than it gave a return for. What 
would go on between the two countries is the exchange 
of their respective productions, and, as previously 
pointed out, what conmiodities passed each way in this 
exchange would be determined, not by the difference in 
wages between the two countries, nor yet by differences 
between them in cost of productiop, but by differences in 
each country in the comparative cost of producing differ- 
ent things. This exchange of commodities would go on 
to the mutual advantage of both countries, increasing 
the amount which each obtained, but no matter to what 
dimensions it grew, how could it lessen the demand for 
labor or have any effect in reducing wages 1 

Now let us change the supposition and imagine such a 
barrier between the two countries as would prevent the 
passage of commodities, whUe permitting the free pas- 
sage of men. No goods produced by the lower-paid 



PROTECTION AND WAGES. 203 

labor of the one conntry could now be brought into the 
other; but would this prevent the reduction of wages? 
Manifestly not. Employers in the higher-wage country, 
being enabled to get in laborers willing to work for less, 
could quickly lower wages. 

What we may thus see by aid of the imagination 
accords with what we do see as a matter of fact. In 
spite of the high duties which shut out commodities on 
the pretense of protecting American labor, American 
workmen in all trades are being forced into combinations 
to protect themselves by checking the competition of the 
labor-market. Our protective tariff on commodities 
raises the price of commodities, but what raising there is 
of wages has been accomplished by trades-unions and 
the Knights of Labor. Break up these organizations 
and what would the tariff do to prevent the forcing 
down of wages in aU the now organized trades? 

A scheme really intended for the protection of work- 
ing-men from the competition of cheap labor would not 
merely prohibit the importation of cheap labor under 
contract, but would prohibit the landing of any laborer 
who had not sufficient means to raise him above the 
necessity of competing for wages, or who did not give 
bonds to join some trades-union and abide by its rules. 
And if, under such a scheme, any duties on commodities 
were imposed, they would be imposed, in preference, on 
such commodities as could be produced with small capi- 
tal, not on those which require large capital— that is to 
say, the effort would be to protect industries in which 
workmen can readily engage on their own account, 
rather than those in which the mere workman can never 
hope to become his own employer. 

Our tariff, Kke aU protective tariffs, aims at nothing of 
this kind. It shields the employing producer from com- 
petition, but in no way attempts to lessen competition 



204 PROTECTION OR FREE TRADE! 

among those who must sell him their labor j and the 
industries it aims to protect are those in which the mere 
workman, or even the workman with a small capital, is 
helpless— those which cannot be carried on without large 
establishments, costly machinery, great amounts of capi- 
tal, or the ownership of natural opportunities which bear 
a high price. 

It is manifest that the aim of protection is to lessen 
competition in the selling of commodities, not in the 
selling of labor. In no case, save in the peculiar and 
exceptional cases I shall hereafter speak of, can a tariff 
on conmiodities benefit those who have labor, not com- 
modities, to sell. Nor is there in our tariff any provision 
that aims at compelling such employers as it benefits to 
share their benefits with their workmen. While it gives 
these employers protection in the goods-market it leaves 
them free trade in the labor-market, and for any protec- 
tion they need workmen have to organize. 

I am not saying that any tariff could raise wages. I 
am merely pointing out that in our protective tariff there 
is no attempt, however inefficient, to do this— that the 
whole aim and spirit of protection is not the protection 
of the sellers of labor but the protection of the buyers of 
labor, not the maintaining of wages but the maintaining 
of profits. The very class that profess anxiety to pro- 
tect American labor by raising the price of what they 
themselves have to sell, notoriously buy labor as cheap 
as they can and fiercely oppose any combination of work- 
men to raise wages. The cry of " protection for Ameri- 
can labor" comes most vociferously from newspapers 
that lie under the ban of the printers' unions ; from coal 
and iron lords who, importing "pauper labor" by 
wholesale, have bitterly fought every effort of their men 
to claim anything like decent wages ; and from factory- 
owners who claim the right to dictate the votes of men. 



PROTECTION AND WAGES. 205 

The whole spirit of protection is against the rights of 
labor. 

This is so obvious as hardly to need illustration, but 
there is a case in which it is so clearly to be seen as to 
tempt me to reference. 

There is one kind of labor in which capital has no 
advantage, and that a kind which has been held from 
remote antiquity to redound to the true greatness and 
glory of a country— the labor of the author, a species of 
labor hard in itself, requiring long preparation, and in 
the vast majority of cases extremely meager in its pecu- 
niary returns. What protection have the protectionist 
majorities that have so long held sway in Congress given 
to this kind of labor? While the American manufac- 
turer of books— the employing capitalist who puts them 
on the market— has been carefully protected from the 
competition of foreign manufacturers, the American 
author has not only not been protected from the com- 
petition of foreign authors, but has been exposed to the 
competition of labor for which nothing whatever is paid. 
He has never asked for any protection save that of com- 
mon justice, but this has been steadily refused. Foreign- 
made books have been saddled with a high protective 
duty, a force of customs examiners is maintained in the 
post-ofl&ce, and an American is not even allowed to 
accept the present of a book from a friend abroad with- 
out paying a tax for it.* But this is not to protect the 



* Although a great stun is raised in the United States every year 
to send the Bible to the heathen in foreign parts, we impose for the 
protection of the home "Bible manufaeturer" a heavy tax upon the 
bringing of Bibles into our country. There have recently been 
complaints of the smuggling of Bibles across our northern frontier, 
which have doubtless inspired our custom-house officers to renewed 
vigilance, since, according to an official advertisement, the following 
property seized for violation of the United States revenue laws was 



206 PROTECTION OR FREE TRADE? 

American author, who as an author is a mere laborer, 
but to protect the American publisher, who is a capitalist. 
And this capitalist, so carefully protected as to what he 
has to sell, has been permitted to compel the American 
author to compete with stolen labor. Congress, which 
year after year has been maintaining a heavy tariff, on 
the hypocritical plea of protecting American labor, has 
steadily refused the bare justice of acceding to an inter- 
national copyright which would prevent American pub- 
lishers from stealing the work of foreign authors, and 
enable American authors not only to meet foreign authors 
on fair terms at home, but to get payment for their 
books when reprinted in foreign countries. An inter- 
national copyright, demanded as it is by honor, by 
morals and by every dictate of patriotic policy, has 
always been opposed by the protective interest.* Could 
anything more clearly show that the real motive of pro- 
tection is always the profit of the employing capitalist, 
never the benefit of labor ? 

What would be thought of the Congressman who 
should propose, as a " working-man's measure," to divide 
the surplus in the treasury between two or three railway 
kings, and who should gravely argue that to do this 
would be to raise wages in all occupations, since the 
railway kings, finding themselves so much richer, would 
at once raise the wages of their employees ; which would 
lead to the raising of wages on all railways, and this 
again to the raising of wages in all occupations? Yet the 

sold at public auction in front of the Custom-House, Detroit, on 
Saturday, February 6, 1886, at 12 o'clock noon : 1 set silver jewelry, 
3 bottles of brandy, 7 yards astrakhan, 1 silk tidy, 7 books, 1 shawl, 
1 sealskin cloak, 4 rosaries, 1 woolen shirt, 2 pairs of mittens, 1 pair 
of stockings, 1 bottle of gin, 1 Bible. 

* An exception is to be made in favor of Horace Greeley, who, 
though a protectionist, did advocate an international copyright. 



PROTECTION AND WAGES. 807 

contention that protective duties on goods raise wages 
involves just such assumptions. 

It is claimed that protection raises the wages of labor 
—that is to say, of labor generally. It is not merely 
contended that it raises wages in the special industries 
protected by the tariff. That would be to confess that 
the benefits of protection are distributed with partiality, 
a thing which its advocates are ever anxious to deny. It 
is always assumed by protectionists that the benefits of 
protection are felt in all industries, and even the wages 
of farm-laborers (in an industry which in the United 
States is not and cannot be protected by the tariff) are 
pointed to as showing the results of protection. 

The scheme of protection is, by checking importation 
to increase the price of protected commodities so as to 
enable the home producers of these commodities to make 
larger profits. It is only as it does this, and so long as 
it does this, that protection can have any encouraging 
effect at all, and whatever effect it has upon wages must 
be derived from this. 

I have already shown that protection cannot, except 
temporarily, increase the profits of producers as pro- 
ducers, but without regard to this it is clear that the 
contention that protection raises wages involves two 
assumptions : (1) that increase in the profits of employers 
means increase in the wages of their workmen ; and (2) 
that increase of wages in the protected occupations 
involves increase of wages in all occupations. 

To state these assumptions is to show their absurdity. 
Is there any one who really supposes that because an 
employer makes larger profits he therefore pays higher 
wages ? 

I rode not long since on the platform of a Brooklyn 
horse-car and talked with the driver. He told me, 
bitterly and despairingly, of his long hours, hard work 



208 PROTECTION OR FREE TRADE! 

and poor pay— how he was chained to that car, a verier 
slave than the horses he drove; and how by turning 
himself into this kind of a horse-driving machine he 
could barely keep wife and children, laying by nothing for 
a " rainy day." 

I said to him, "Would it not be a good thing if the 
Legislature were to pass a law allowing the companies to 
raise the fare from five to six cents, so as to enable them 
to raise the wages of their drivers and conductors ? " 

The driver measured me with a quick glance, and then 
exclaimed: "They give us more, because they made 
more ! You might raise the fare to six cents or to sixty 
cents, and they would not pay us a penny more. No 
matter how much they made, we would get no more, so 
long as there are hundreds of men waiting and anxious 
to take our places. The company would pay higher divi- 
dends or water the stock ; not raise our pay." 

Was not the driver right ? Buyers of labor, Kke buyers 
of other things, pay, not according to what they can, but 
according to what they must. There are occasional 
exceptions, it is true ; but these exceptions are referable 
to motives of benevolence, which the shrewd business 
man keeps out of his business, no matter how much he 
may otherwise indulge them. Whether you raise the 
profits of a horse-car company or of a manufacturer, 
neither wiU on that account pay any higher wages. 
Employers never give the increase of their profits as a 
reason for raising the wages of their workmen, though 
they frequently assign decreased profits as a reason for 
reducing wages. But this is an excuse, not a reason. 
The true reason is that the dull times which diminish 
their profits increase the competition of workmen for 
employment. Such excuses are given only when employ- 
ers feel that if they reduce wages their employees wiU be 
compelled to submit to the reduction, since others will 



PROTECTION AND WAGES. 209 

be glad to step into their places. And where trades- 
unions succeed in checking this competition they are 
enabled to raise wages. Since my talk with the driver, 
the horse-car employees of New York and Brooklyn, 
organized into assemblies of the Knights of Labor and 
supported by that association, have succeeded in some- 
what raising their pay and shortening their hours, thus 
gaining what no increase in the profits of the companies 
would have had the slightest tendency to give them. 

No matter how much a protective duty may increase 
the profits of employers, it wiU have no effect in raising 
wages unless it so acts upon competition as to give work- 
men power to compel an increase of wages. 

There are cases in which a protective duty may have 
this effect, but only to a small extent and for a short 
time. "When a duty, by increasing the demand for a 
certain domestic production, suddenly increases the 
demand for a certain kind of skilled labor, the wages of 
such labor may be temporarily increased, to an extent 
and for a time determined by the difficulties of obtaining 
skilled laborers from other countries or of the acquke- 
ment by new laborers of the needed skill. 

But in any industry it is only the few workmen of 
peculiar skill who can thus be affected, and even when 
by these few such an advantage is gained, it can be main- 
tained only by trades-unions that limit entrance to the 
craft. The cases are, I think, few indeed in which any 
increase of wages has thus been gained by even that 
small class of workmen who in any protected industry 
require such exceptional skill that their ranks cannot 
easily be swelled ; and the cases are fewer still, if they 
exist at aU, in which the difficulties of bringing workmen 
from abroad, or of teaching new workmen, have long 
sufl&ced to maintain such increase. As for the great 
mass of those engaged in the protected industries, their 



210 PROTECTION OR FREE TRADE? 

labor can hardly be called skilled. Much of it can be 
performed by ordinary unskilled laborers, and much of 
it does not need even the physical strength of the adult 
man, but consists of the mere tending of machinery, or 
of manipulations which can be learned by boys and girls 
in a few weeks, a few days, or even a few hours. As to 
all this labor, which constitutes by far the greater part 
of the labor required in the industries we most carefully 
protect, any temporary effect which a tariff might have 
to increase wages in the way pointed out would be so 
quickly lost that it could hardly be said to come into 
operation. For an increase in the wages of such occupa- 
tions would at once be counteracted by the flow of labor 
from other occupations. And it must be remembered 
that the effect of "encouraging" any industry by taxa- 
tion is necessarily to discourage other industries, and 
thus to force labor into the protected industries by driv- 
ing it out of others. 

Nor could wages be raised if the bounty which the 
tariff aims to give employing producers were given 
directly to their workmen. If, instead of laws intended 
to add to the profits of the employing producers in cer- 
tain industries, we were to make laws by which so much 
should be added to the wages of the workmen, the 
increased competition which the bounty would cause 
would soon bring wages plus the bounty to the rate at 
which wages stood without the bounty. The result 
would be what it was in England when, during the early 
part of this century, it was attempted to improve the 
miserable condition of agricultural laborers by " grants in 
aid of wages" from parish rates. Just as these grants 
were made, so did the wages paid by the farmers sink. 

The car-driver was right. Nothing could raise his 
wages that did not lessen the competition of those who 
stood ready to take his place for the wages he was get- 



PROTECTION AND WAGES. 211 

ting. If we were to enact that every car-driver should 
be paid a dollar a day additional from public funds, the 
result would simply be that the men who are anxious to 
get places as car-drivers for the wages now paid would 
be as anxious to get them at one dollar less. If we were 
to give every car-driver two dollars a day, the companies 
would be able to get men without paying them anything, 
just as where restaurant waiters are customarily feed by 
the patrons, they get little or no wages, and in some 
cases even pay a bonus for their places. 

But if it be preposterous to imagine that any effect a 
tariff may have to raise profits in the protected industries 
can raise wages in those industries, what shall we say of 
the notion that such raising of wages in the protected 
industries would raise wages in all industries? This is 
like saying that to dam the Hudson River would raise 
the level of New York Harbor and consequently that of 
the Atlantic Ocean. Wages, like water, tend to a level, 
and unless raised in the lowest and widest occupations 
can be raised in any particular occupation only as it is 
walled in from competition. 

The general rate of wages in every country is mani- 
festly determined by the rate in the occupations which 
require least special skill, and to which the man who has 
nothing but his labor can most easUy resort. As they 
engage the greater body of labor these occupations con- 
stitute the base of the industrial organization, and are to 
other occupations what the ocean is to its bays. The 
rate of wages in the higher occupations can be raised 
above the rate prevailing in the lower, only as the higher 
occupations are shut off from the inflow of labor by their 
greater risk or uncertainty, by their requirement of 
superior skill, education or natural ability, or by restric- 
tions such as those imposed by trades-unions. And to 
secure anything like a general rise of wages, or even to 



212 PROTECTION OR FREE TRADE? 

secure a rise of wages in any occupation upon ingress 
to which restrictions are not at the same time placed, it is 
necessary to raise wages in the lower and wider occupa- 
tions. That is to say, to return to our former illustra- 
tion, the level of the bays and harbors that open into it 
cannot be raised until the level of the ocean is raised. 

If it were evident in no other way, the recognition of 
this general principle would suffice to make it clear that 
duties on imports can never raise the general rate of 
wages. For import duties can only "protect" occupa- 
tions in which there is not sufficient labor employed to 
produce the supply we need. The labor thus engaged 
can never be more than a fraction of the labor engaged 
in producing commodities of which we not only provide 
the home supply but have a surplus for export, and the 
labor engaged in work that must be done on the spot. 

No matter what the shape or size of an iceberg, the 
mass above the water must be very much less than the 
mass below the water. So no matter what be the condi- 
tions of a country or what the peculiarities of its indus- 
try, that part of its labor engaged in occupations that 
can be "protected" by import duties must always be 
small as compared with that engaged in occupations that 
cannot be protected. In the United States, where pro- 
tection has been carried to the utmost, the census returns 
show that not more than one-twentieth of the labor of 
the country is engaged in protected industries. 

In the United States, as in the world at large, the 
lowest and widest occupations are those in which men 
apply their labor directly to nature, and of these agricul- 
ture is the most important. How quickly the rise of 
wages in these occupations will increase wages in all oc- 
cupations was shown in the early days of California, as 
afterwards in Australia. Had anything happened in 
California to increase the demand for cooks or carpenters 



PROTECTION AND WAGES. ai3 

or painters, the rise in such wages would have been 
quickly met by the inflow of labor from other occupa- 
tions, and in this way retarded and finally neutralized. 
But the discovery of the placer-mines, which greatly 
raised the wages of unskilled labor, raised wages in all 
occupations. 

The diJBference of wages between the United States and 
European countries is itself an illustration of this prin- 
ciple. During our colonial days, before we had any pro- 
tective tariff, ordinary wages were higher here than in 
Europe. The reason is clear. Land being easy to 
obtain, the laborer could readily employ himself, and 
wages in agriculture being thus maintained at a higher 
level, the general rate of wages was higher. And since 
up to the present time it has been easier to obtain land 
here than in Europe, the higher rate of wages in agricul- 
ture has kept up a higher general rate. 

To raise the general rate of wages in the United States 
the wages of agricultural labor must be raised. But our 
tariff does not and cannot raise even the price of agricul- 
tural produce, of which we are exporters, not importers. 
Yet, even had we as dense a population in proportion to 
our available land as Great Britain, and were we, like 
her, importers not exporters of agricultural productions, 
a protective tariff upon such productions could not 
increase agricultural wages, still less could it increase 
wages in other occupations, which would then have 
become the widest. This we may see by the effect of the 
corn-laws in Great Britain, which was to increase, not 
the wages of the agricultural laborer, nor even the profits 
of the farmer, but the rent of the agricultural landlord. 
And even if the differentiation between landowner, 
farmer and laborer had, under the conditions I speak of, 
not become as clear here as in Great Britain, nothing 
which benefited the farmer would have the slightest 



214 PROTECTION OR FREE TRADE? 

tendency to raise wages, save as it benefited liim, not as 
an owner of land or an owner of capital, but as a laborer. 

We thus see from theory that protection cannot raise 
wages. That it does not, facts show conclusively. This 
has been seen in Spain, in France, in Mexico, in England 
during protection times, and everywhere that protection 
has been tried. In countries where the working-classes 
have little or no influence upon government it is never 
even pretended that protection raises wages. It is only 
in countries like the United States, where it is necessary 
to cajole the working-class, that such a preposterous plea 
is made. And here the failure of protection to raise 
wages is shown by the most evident facts. 

Wages in the United States are higher than in other 
countries, not because of protection, but because we have 
had much vacant land to overrun. Before we had any 
tariff, wages were higher here than in Europe, and far 
higher, relatively to the productiveness of labor, than 
they are now after our years of protection. In spite of 
all our protection — and, for the last twenty-four years at 
least, protectionists have had it aU their own way— the 
condition of the laboring-classes of the United States has 
been slowly but steadily sinking to that of the " pauper 
labor " of Europe. It does not f oUow that this is because 
of protection, but it is certain that protection has proved 
powerless to prevent it. 

To discover whether protection has or has not bene- 
fited the working-classes of the United States it is not 
necessary to array tables of figures which only an expert 
can verify and examine. The determining facts are 
notorious. It is a matter of common knowledge that 
those to whom we have given power to tax the American 
people "for the protection of American industry" pay 
their employees as little as they can, and make no scruple 
of importing the very foreign labor against whose prod- 



PROTECTION AND WAGES. 216 

ucts the tariff is maintained. It is notorious that wages 
in the protected industries are, if anything, lower than in 
the unprotected industries, and that, though the pro- 
tected industries do not employ more than a twentieth of 
the working population of the United States, there occur 
in them more strikes, more lockouts, more attempts to 
reduce wages, than in all other industries. In the highly 
protected industries of Massachusetts, official reports 
declare that the operative cannot get a living without 
the work of wife and children. In the highly protected 
industries of New Jersey, many of the "protected" 
laborers are children whose parents are driven by their 
necessities to find employment for them by misrepresent- 
ing their age so as to evade the State law. In the 
highly protected industries of Pennsylvania, laborers, 
for whose sake we are told this high protection is 
imposed, are working for sixty-five cents a day, and 
half -clad women are feeding furnace fires. "Pluck-me 
stores," company tenements and boarding-houses. Pinker- 
ton detectives and mercenaries, and all the forms and 
evidences of the oppression and degradation of labor are, 
throughout the country, characteristic of the protected 
industries. 

The greater degradation and unrest of labor in the 
protected than in the unprotected industries may in part 
be accounted for by the fact that the protected employers 
have been the largest importers of "foreign pauper 
labor." But, in some part at least, it is due to the 
greater fluctuations to which the protected industries 
are exposed. Being shut off from foreign markets, 
scarcity of their productions cannot be so quickly met 
by importation, nor surplus relieved by exportation, and 
so with them for much of the time it is either " a feast or 
a famine." These violent fluctuations tend to bring 
workmen into a state of dependence, if not of actual 



216 PEOTECTION OE FREE TRADE? 

peonage, and to depress wages below the general stan- 
dard. But whatever be the reason, the fact is that so 
far is protection from raising wages in the protected 
industries, that the capitalists who carry them on would 
soon " enjoy " even lower-priced labor than now, were it 
not that wages in them are kept up by the rate of wages 
in the unprotected industries. 



CHAPTER XX. 

THE ABOLITION OF PROTECTION. 

OUR inquiry has sufficiently shown the futility and 
absurdity of protection. It only remains to con- 
sider the plea that is always set up for protection when 
other excuses fail— the plea that since capital has been 
invested and industry organized upon the basis of pro- 
tection it would be unjust and injurious to abolish pro- 
tective duties at once, and that their reduction must be 
gradual and slow. This plea for delay, though accepted 
and even urged by many of those who up to this time 
have been the most conspicuous opponents of protection, 
will not bear examination. If protection be unjust, if it 
be an infringement of equal rights that gives certain 
citizens the power to tax other citizens, then anything 
short of its complete and immediate abolition involves a 
continuance of injustice. No one can acquire a vested 
right in a wrong ; no one can claim property in a privi- 
lege. To admit that privileges which have no other basis 
than a legislative Act cannot at any time be taken away 
by legislative Act, is to commit ourselves to the absurd 
doctrine that has been carried to such a length in Great 
Britain, where it is held that a sinecure cannot be 
abolished without buying out the incumbent, and that 
because a man's ancestors have enjoyed the privilege of 
living on other people, he and Ms descendants, to the 

217 



218 PROTECTION OB FREE TRADE! 

remotest time, have acquired a sacred right to live upon 
other people. The true doctrine— of which we ought 
never, on any pretense, to yield one iota— is that enunci- 
ated in our Declaration of Independence, the self-evident 
doctrine that men are endowed by their Creator with 
equal and unalienable rights, and that any law or insti- 
tution that denies or impairs this natural equality may 
at any time be altered or abolished. And no more salu- 
tary lesson could to-day be taught to capitalists through- 
out the world than that justice is an element in the safety 
of investments, and that the man who trades upon the 
ignorance or the enslavement of a people does so at his 
own risk. A few such lessons, and every throne in 
Europe would topple, and every great standing army 
melt away. 

Moreover, abolition at once is the only way in which 
the industries now protected could be treated with any 
fairness. The gradual abolition of protection would give 
rise to the same scrambling and pipe-laying and log- 
rolling which every tariff change brings about, and the 
stronger would save themselves at the expense of the 
weaker. 

But further than this, the gradual abolition of protec- 
tion would not only continue for a long time, though in 
a diminishing degree, the waste, loss and injustice 
inseparable from the system, but during all this period 
the anticipation of coming changes and the uncertainty 
in regard to them would continue to inspire insecurity 
and depress business ; whereas, were protection abolished 
at once, the shock, whatever it might be, would soon be 
over, and exchange and industry could at once reorganize 
upon a sure basis. Even on the theory that the abolition 
of protection involves temporary disaster, immediate 
abolition is as preferable to gradual abolition as amputa- 
tion at one operation is to amputation by inches. 



HBB ABOLITION OF PROTECTION. 219 

And to the working-classes— the classes for whom 
those who deplore sudden change profess to have most 
concern— the difference would be greater stiU. It is 
always to the relative advantage of the poorer classes 
that any change involving disaster should be as sudden 
as possible, since the effect of delay is simply to give the 
richer classes opportunity to avoid it at the expense of 
the poorer. 

If there is to be a certain loss to any community, 
whether by flood, by fire, by invasion, by pestilence, or 
by commercial convulsion, that loss wiU fall more lightly 
on the poor and more heavily on the rich the shorter the 
time in which it is concentrated. If the currency of a 
country slowly depreciates, the depreciating currency 
wiU be forced into the hands of those least able to pro- 
tect themselves, the price of commodities will advance 
in anticipation of the depreciation, while the price of 
labor will lag along after it ; capitalists will have oppor- 
tunity to make secure their loans and to speculate in 
advancing prices, and the loss will thus fall with far 
greater relative severity upon the poor than upon the 
rich. In the same way, if a depreciated currency be 
slowly restored to par, the price of labor falls more 
quickly than the price of commodities ; debtors struggle 
along in the endeavor to pay their obligations in an 
appreciating currency, and those who have the most 
means are best able to avoid the disadvantages and avail 
themselves of the speculative opportunities brought 
about by the change. But the more suddenly any given 
change in the value of currency takes place the more 
equal will be its effects. 

So it is with the imposition of public burdens. It is 
manifestly to the advantage of the poorer class that any 
great public expense be met at once rather than spread 
over years by means of public debts. Thus, if the 



220 PEOTECTION OR FREE TRADE? 

expenses of our civil war had been met by taxation 
levied at the time, such taxation must have fallen heavily 
upon the rich. But by the device of a public debt— a 
twin invention to that of indirect taxation— the cost of 
the war was not, as was pretended, shifted from present 
time to future time (for that would have been possible only 
had the means to carry on the war been borrowed from 
abroad, which was not the case), but taxation, which 
otherwise must have fallen upon individuals in propor- 
tion to their wealth, was changed into taxation spread 
over a long series of years and falling upon individuals 
in proportion, not to their means, but to their consump- 
tion, thus imposing upon the poor far greater relative 
burdens than upon the rich. Whether the rich would 
have had the patriotism to support a war which thus 
called upon them for sacrifices more commensurate with 
those of the poor, who in all wars furnish the far greater 
portion of " the food for powder," is another matter ; but 
it is certain that the spreading of the war taxation over 
years has not only made the cost of the war many times 
greater, but has been to the advantage of the rich and to 
the disadvantage of the working-classes. 

If the abolition of protection is, as protectionists pre- 
dict, certain to disorganize trade and industry, then it is 
better for all, and especially is it better for the working- 
classes, that the change should be sharp and short. If 
the return to a natural condition of trade and produc- 
tion must temporarily throw men out of employment, 
then it is better that they should be thrown out at once 
and have done with it, than that the same loss of 
employment should be spread over a series of years with 
a constant depressing effect upon the labor-market. In 
a sharp but short period of depression the public purse 
could, without serious consequences, be drawn upon to 
relieve distress, but any attempt to relieve in that way 



THE ABOLITION OP PROTECTION. 221 

the less general but more protracted distress incident to 
a long period of depression, would tend to create an 
army of habitual paupers. 

But, in truth, the talk about the commercial convul- 
sions and industrial distress that would follow the aboli- 
tion of protection is as baseless as the story with which 
Southern slaveholders during the war attempted to keep 
their chattels from running away— that the Northern 
armies would sell them to Cuba ; as baseless as the pre- 
dictions of Republican politicians that the election of a 
Democratic President would mean the assumption of the 
Confederate debt, if not the revival of the " Lost Cause." 

The real fear that underlies all this talk of the disas- 
trous effects of the sudden abolition of protection was 
weU exemphfied in a conversation a friend of mine had 
awhile ago with a large manufacturer, who belongs to a 
combination which prevents competition at home while 
the tariff prevents competition from abroad. The manu- 
facturer was inveighing against any meddling with the 
tariff, and dilating upon the ruin that would be brought 
upon the country by free trade. 

" Yes," said my friend, who had been listening with an 
air of sympathetic attention, "I suppose, if the tariff 
were abolished, you would have to shut up your works." 

"Well, no; not quite that," said the manufacturer. 
" We could go ahead, even with free trade ; but then— we 
couldn't get the same profit." 

The notion that our manufactures would be suspended 
and our iron- works closed and our coal-mines shut down 
by the abolition of protection is a notion akin to that of 
"the tail wagging the dog." Where are the goods to 
come from which are thus to deluge our markets, and 
how are they to be paid for? There is not productive 
power enough in Europe to supply them, nor are there 
ships to transport them, to say nothing of the effect 



d23 PROTECTION OR FREE TRADE? 

upon European prices of the demands of sixty millions 
of people, who, head for head, consume more than any 
other people in the world. And since other countries 
are not going to deluge us with the products of their 
labor without demanding the products of our own labor 
in payment, any increase in our imports from the aboli- 
tion of protection would involve a corresponding increase 
in exports. 

The truth is that the change would be not only bene- 
ficial to our industries at large— four-fifths of which, at 
least, are not brought into competition with imported 
commodities, but it would be beneficial even to the " pro- 
tected " industries. In those that are sheltered by home 
monopolies, profits would be reduced ; in those in which 
the tariff permits the use of inferior machinery and 
slovenly methods, better machinery would have to be 
provided and better methods introduced; but in the 
great bulk of our manufacturing industries, the effect 
would be only beneficial, the reduction in the cost of 
material far more than compensating for the reduction 
in prices. And with a lower cost of production foreign 
markets from which our manufacturers are now shut out 
would be opened. If any industry would be "crushed" 
it could only be some industry now carried on at national 
loss. 

The increased power which the removal of restrictions 
upon trade would give in the production of wealth would 
be felt in all directions. Instead of a coUapse there 
would be a revivification of industry. Rings would be 
broken up, and where profits are now excessive they 
would come down; but production would go on under 
healthier conditions and with greater energy. American 
manufacturers would begin to find markets the whole 
world over. American ships would again sail the high 
seas. The Delaware would ring like the Clyde with the 



THE ABOLITION OP PROTECTION. 223 

clash of riveting hammers, and the United States would 
rapidly take that first place in the industrial and com- 
mercial world to which her population and her natural 
resources entitle her, but which is now occupied by Eng- 
land, whUe legislation and administration would be 
relieved of a great cause of corruption, and all govern- 
mental reforms would be made easier. 



CHAPTER XXI. 

INADEQUACY OP THE FREE-TRADE ARGUMENT. 

THE point we have now reached is that at which dis- 
cussions of the tariff question usually end— the 
extreme limit to which the avowed champions of the 
opposing policies carry their controversy. 

We have, in fact, reached the legitimate end of our 
inquiry so far as it relates to the respective merits of 
protection and free trade. The stream, whose course 
our examination has been following, here blends with 
other streams, and though it still flows on, it is as part 
of a wider and deeper river. As he who would trace the 
waters of the Ohio to their final union with the ocean 
cannot stop when the Ohio ends, but must stiU follow on 
that mighty Mississippi which unites streams from far 
different sources, so, as I said in the beginning, really to 
understand the tariff question we must go beyond the 
tariff question. This we may now see. 

So far as relates to questions usually debated between 
protectionists and free traders our inquiiy is now com- 
plete and conclusive. We have seen the absurdity of 
protection as a general principle and the fallacy of the 
special pleas that are made for it. We have seen that 
protective duties cannot increase the aggregate wealth of 
the country that enforces them, and have no tendency to 
give a greater proportion of that wealth to the worldng- 

224 



INADEQUACY OF THE FREE-TRADE ARGUMENT. 225 

class. "We have seen that their tendencies, on the con- 
trary, are to lessen aggregate wealth, and to foster 
monopolies at the expense of the masses of the people. 

But although we have directly or inferentially dis- 
proved every argument that is made for protection, 
although we have seen conclusively that protection is in 
its nature inimical to general interests, and that free 
trade is in its nature promotive of general interests, yet 
if our inquiry were to stop here we should not have 
accomplished the purpose with which we set out. For 
my part, did it end here, I should deem the labor I have 
so far spent in writing this book little better than 
wasted. For aU that we have seen has, with more or 
less coherence and clearness, been shown again and 
again. Yet protection still retains its hold on the popu- 
lar mind. And until something more is shown, protec- 
tion will retain this hold. 

In exposing the fallacies of protection I have endea- 
vored in each case to show what has made the fallacy 
plausible, but it still remains to explain why such 
exposures produce so little effect. The very conclusive- 
ness with which our examination has disproved the 
claims of protection will suggest that there must be 
something more to be said, and may weU prompt the 
question, "If the protective theory is really so incon- 
gruous with the nature of things and so inconsistent with 
itself, how is it that after so many years of discussion it 
still obtains such wide and strong support?" 

Free traders usually attribute the persistence of the 
beUef in protection to popular ignorance, played upon 
by special interests. But this explanation will hardly 
satisfy an unbiased mind. Vitality inheres in truth, not 
in error. Though accepted error has always the strength 
of habit and authority, and the battle against it must 
always be hard at first, yet the tendency of discussion in 



226 PROTECTION OR FREE TRADE! 

which error is confronted with truth is to make the truth 
steadily clearer. That a theory which seems wholly false 
holds its ground in popular belief despite wide and long 
discussion, should prompt its opponents to inquire 
whether their arguments have reaUy gone to the roots of 
popular belief, and whether this belief does not derive 
support from truths they have not considered, or from 
errors not yet exposed, which stUl pass for truths— 
rather than to attribute its vitality to popular incapacity 
to recognize truth. 

I shall hereafter show that the protective idea does 
indeed derive support from doctrines that have been 
actively taught and zealously defended by the very 
economists who have assailed it (who, so to speak, have 
been vigorously defending protection with the right hand 
while raining blows upon it with the left), and from 
habits of thought which the opponents no less than the 
advocates of protection have failed to call in question. 
But what I now wish to point out is the inadequacy of 
the arguments which free traders usually rely on to 
convince working-men that the abolition of protection is 
for their interest. 

In our examination we have gone as far, and in cer- 
tain respects somewhat further than free traders usually 
go. But what have we proved as to the main issue? 
Merely that it is the tendency of free trade to increase the 
production of wealth, and thus to permit of the increase 
of wages, and that it is the tendency of protection to 
decrease the production of wealth and foster certain 
monopolies. But from this it does not foUow that the 
abolition of protection would be of any benefit to the 
working-class. The tendency of a brick pushed off a 
chimney-top is to faU to the surface of the ground. But 
it will not fall to the surface of the ground if its faU be 
intercepted by the roof of a house. The tendency of 



INADEQUACY OF THE FEEE-TRADE ARGUMENT. 227 

anytMng that increases the productive power of labor is 
to augment wages. But it will not augment wages 
under conditions in which laborers are forced by com- 
petition to offer their services for a mere living. 

In the United States, as in all countries where political 
power is in the hands of the masses, the vital point in 
the tariff controversy is as to its effect upon the earnings 
of " the poor people who have to work." * 

But this point lies beyond the limit to which free 
traders are accustomed to confine their reasoning. They 
prove that the tendency of protection is to reduce the 
production of wealth and to increase the price of com- 
modities, and from this they assume that the effect of the 
abolition of protection would be to increase the earnings 
of labor. But not merely is such an assumption logically 
invalid until it is shown that there is nothing in existing 
conditions to prevent the working-classes from getting 
the benefit of this tendency; but, although in itself a 
natural assumption, it is in the minds of "the poor 
people who have to work " contradicted by obvious facts. 

In this is the invalidity of the free-trade argument, 
and here, and not in the ignorance of the masses, is the 
reason why all attempts to convert working-men to the 
free-tradeism which would substitute a revenue tariff for 
a protective tariff must, save under such conditions as 
existed in England forty years ago, utterly fail. 

While both sides have shown the same indisposition to 
go to the heart of the controversy, there can be no ques- 
tion that so far as issue is joined between protectionists 
and free traders, in current discussion, the free traders 
have the best of the argument. 



* I find this suggestive phrase in a protectionist newspaper. But 
it well expresses the attitude toward labor of many of the free-trade 
writers also. 



228 PROTECTION OE FREE TRADE? 

But that the belief in protection has survived long and 
wide discussion, that it seems to spring up again when 
beaten down and to arise with apparent spontaneity in 
communities such as the United States, Canada and 
Australia, that have grown up without tariffs, and where 
the system lacks the advantage of inertia and of enlisted 
interests, proves that beyond the discussion there must 
be something which strongly commends protection to 
the popular mind. 

This may also be inferred from what protectionists 
themselves say. Beaten in argument, the protectionist 
usually falls back upon some declaration which implies 
that the real grounds of his belief have been untouched, 
and which generally takes the form of an assertion that 
though free trade may be true in theory it fails in prac- 
tice. In such form the assertion is untenable. A theory 
is but an explanation of the relation of facts, and no- 
thing can be true in theory that is not true in practice. 
But free traders really beg the question when they 
answer by merely pointing this out. The real question 
is, whether the reasoning on which free traders rely 
takes into account all existing conditions? What the 
protectionist means, or at least the perception that he 
appeals to, when he talks in this way of the difference 
between theory and fact, is, that the free-trade theory 
does not take into account all existing facts. And this 
is true. 

As the tariff question is presented, there are indeed, 
under existing social conditions, two sides to the shield, 
so that men who look only at one side, closing their 
eyes to the other, may continue, with equal confidence, 
to hold opposite opinions. And that the distinction 
between them may, with not entire inaptness, be 
described as that of exclusively regarding theory and 
that of exclusively regarding facts, we shall see when 



INADEQUACY OF THE FREE-TRADE ARGUMENT. 229 

we have developed a theory which will embrace aU the 
facts, and which will explain not only why it is that 
honest men have so diametrically differed upon the ques- 
tion of protection vs. free trade, but why the advocates 
of neither policy have been inclined to press on to that 
point where honest differences may be reconciled. For 
we have reached the place where the Ohio of the tariff 
question flows into the Mississippi of the great social 
question. It need not surprise us that both parties to 
the controversy, as it has hitherto been conducted, 
should stop here, for it would be as rational to expect 
any thorough treatment of the social question from the 
well-to-do class represented in the English Cobden Club 
or the American Iron and Steel Association, or from 
their apologists in professorial chairs, as it would be to 
look for any thorough treatment of the subject of 
personal liberty in the controversies of the slave-holding 
Whigs and slave-holding Democrats of forty years ago, 
or in the sermons of the preachers whose salaries were 
paid by them. 



CHAPTER XXTT. 

THE REAL WEAKNESS OP FREE TRADE. 

HOW the abolition of protection would stimnlate 
production, weaken monopolies and relieve govern- 
ment of a great cause of corruption, we have seen. 

" But what," it will be asked, " would be the gain to 
working-men ? Will wages increase ? " 

For some time, and to some extent, yes. For the 
spring of industrial energy consequent upon the removal 
of the dead-weight of the tariff would for a time make 
the demand for labor brisker and employment steadier, 
and in occupations where they can combine, working- 
men would have better opportunity to reduce their hours 
and increase their wages, as, since the abolition of the 
protective tariff in England, many trades there have 
done. But even from the total abolition of protection, 
it is impossible to predict any general and permanent 
increase of wages or any general and permanent improve- 
ment in the condition of the working-classes. The effect 
of the abolition of protection, great and beneficial though 
it must be, would in nature be similar to that of the 
inventions and discoveries which in our time have so 
greatly increased the production of wealth, yet have 
nowhere really raised wages or of themselves improved 
the condition of the working-classes. 

230 



THE REAL WEAKNESS OF FREE TRADE. 231 

Here is the weakness of free trade as it is generally 
advocated and understood. 

The working-man asks the free trader : " How will the 
change you propose benefit me ? " 

The free trader can only answer: "It will increase 
wealth and reduce the cost of commodities." 

But in our own time the working-man has seen wealth 
enormously increased without feeling himself a sharer in 
the gain. He has seen the cost of commodities greatly 
reduced without finding it any easier to hve. He looks 
to England, where a revenue tariff has for some time 
taken the place of a protective tariff, and there he finds 
labor degraded and underpaid, a general standard of 
wages lower than that which prevails here, while such 
improvements as have been made in the condition of the 
working-classes since the abolition of protection are 
clearly not traceable to that, but to trades-unions, to 
temperance and beneficial societies, to emigration, to 
education, and to such acts as those regulating the labor 
of women and children, and the sanitary conditions of 
factories and mines. 

And seeing this, the working-man, even though he 
may realize with more or less clearness the hypocrisy of 
the rings and combinations which demand tariff duties for 
" the protection of American labor," accepts the faRacies 
of protection, or at least makes no effort to throw them 
off, not because of their strength so much as of the 
weakness of the appeal which free trade makes to him. 
A considerable proportion, at least, of the most intelli- 
gent and influential of American working-men are fully 
conscious that "protection" does nothing for labor, but 
neither do they see what free trade could do. And so 
they regard the tariff question as one of no practical con- 
cern to working-men— an attitude hardly less satisfac- 
tory to the protected interests than a thorough belief in 



233 PROTECTION OR FREE TRADE? 

protection. For when an interest is already intrenched 
in law and habit of thought, those who are not against it 
are for it 

To prove that the abolition of protection would tend 
to increase the aggregate wealth is not of itself enough 
to evoke the strength necessary to overthrow protection. 
To do that, it must be proved that the abolition of pro- 
tection would mean improvement hi the condition of the 
masses. 

It is, as I have said, natural to assume that increased 
production of wealth would be for the benefiit of all, and 
to a child, a savage, or a civilized man who lived in his 
study and did not read the daily papers, this would 
doubtless seem a necessary assumption. Yet, to the 
majority of men in civilized society, so far is this assump- 
tion from seeming necessary, that current explanations of 
the most important social phenomena involve the reverse. 

"Without question the most impoi-tant social phenomena 
of our time arise from that partial paralysis of industry 
which in all highly civilized countries is in some degree 
chronic, and which at recurring periods becomes inten- 
sified in wide-spread and long-continued industrial 
depressions. What is the current explanation of these 
phenomena? Is it not that which attributes them to 
over-production 1 

This explanation is positively or negatively supported 
even by men who attribute to popular ignorance the 
failure of the masses to appreciate the benefits of sub- 
stituting a revenue tariff for a protective tariff. But so 
long as conditions which bring racking anxiety and 
bitter privation to millions are commonly attributed to 
the over-production of wealth, is it any wonder that a 
reform which is urged on the ground that it would still 
further increase the production of wealth should fail to 
arouse popular enthusiasm ? 



i 



THE REAL WEAKJTESS OF FREE TRADE. 233 

If, indeed, it be popular ignorance that gives persis- 
tence to the belief in protection, it is an ignorance that 
extends to questions far more important and pressing 
than any question of tariff— an ignorance that the advo- 
cates of free trade have done nothing to enlighten, and 
that they can do nothing to enlighten until they explain 
why it is that in spite of the enormous increase of pro- 
ductive power that has been going on with accelerating 
rapidity all this century it is yet so hard for the mere 
laborer to get a living. 

In this great fact, that increase in wealth and in the 
power of producing wealth does not bring any general 
benefit in which aU classes share— does not for the great 
masses lessen the intensity of the struggle to live, lies 
the explanation of the popular weakness of free trade. 
It is owing to the increasing appreciation of this fact, 
and not to accidental causes, that all over the civilized 
world the free-trade movement has for some time been 
losing energy. 

American revenue reformers delude themselves if they 
imagine that protection can now be overthrown in the 
United States by a movement on the lines of the Cobden 
Club. The day for that has passed. 

It is true that the British tariff reformers of forty 
years ago were enabled on these lines to arouse the 
popular enthusiasm necessary to overthrow protection. 
But not only did the fact that the British tariff made 
food dear enable them to appeal to sympathy and imagi- 
nation with a directness and force impossible where the 
commodities affected by a tariff are not of such prime 
importance; but the feeling of that time in regard to 
such reforms was far more hopeful. The great social 
problems which to-day loom so dark on the horizon of 
the civilized world were then hardly perceived. In the 
destruction of political tyranny and the removal of trade 



234 PROTECTION OR FREE TRADE? 

restrictions ardent and generous spirits saw the emanci- 
pation of labor and the eradication of chronic poverty, 
and there was a confident belief that the industrial 
inventions and discoveries of the new era which the 
world had entered would elevate society from its very 
foundations. The natural assumption that increase in 
the general wealth must mean a general improvement in 
the condition of the people was then confidently made. 

But disappointment after disappointment has chilled 
these hopes, and, just as faith in mere republicanism has 
weakened, so the power of the appeal that free traders 
make to the masses has weakened with the decline of 
the belief that mere increase in the power of production 
will increase the rewards of labor. Instead of the aboli- 
tion of protection in Great Britain being followed, as 
was expected, by the overthrow of protection everywhere, 
it is not only stronger throughout the civilized world 
than it was then, but is again raising its head in Great 
Britain. 

It is useless to tell working-men that increase in the 
general wealth means improvement in their condition. 
They know by experience that this is not true. The 
working-classes of the United States have seen the 
general wealth enormously increased, and they have also 
seen that, as wealth has increased, the fortunes of the 
rich have grown larger, without its becoming a whit 
easier to get a living by labor. 

It is true that statistics may be arrayed in such way as 
to prove to the satisfaction of those who wish to believe 
it, that the condition of the working-classes is steadily 
improving. But that this is not the fact working-men 
weU know. It is true that the average consumption has 
increased, and that the cheapening of commodities has 
brought into common use things that were once con- 
sidered luxuries. It is also true that in many trades 



THE EEAL WEAKNESS OF FREE TRADE. 235 

wages have been somewhat raised and hours reduced by 
combinations among workmen. But although the prizes 
that are to be gained in the lottery of life— or, if any one 
prefers so to call them, the prizes that are to be gained 
by superior skill, energy and foresight— are constantly 
becoming greater and more glittering, the blanks grow 
more numerous. The man of superior powers and 
opportunities may hope to count his millions where a 
generation ago he could have hoped to count his tens of 
thousands; but to the ordinary man the chances of 
failure are greater, the fear of want more pressing. It is 
harder for the average man to become his own employer, 
to provide for a family and to guard against contin- 
gencies. The anxieties attendant on the fear of losing 
employment are becoming greater and greater, and the 
fate of him who falls from his place more direful. To 
prove this it is not necessary to cite the statistics that 
show how pauperism, crime, insanity and suicide are 
increasing faster than our increase in population. Who 
that reads our daily papers needs any proof that the 
increase in the aggregate of wealth does not mean 
increased ease of gaining a living by labor? 

Here is an item which I take from the papers as I 
write. I do not take it because equally striking items 
are rare, but because I find a comment on it which I 
should also like to quote : 

STARVED TO DEATH IN OHIO. 

Dayton, O., August 26.— One of the most horrible deaths that 
ever occurred in a civilized comtnunity was that of Frank Waltzman, 
which happened in this city yesterday morning. He has seven chil- 
dren and a wife, and was once a prominent citizen of Xenia, O. He 
tried his hand at any kind of business where he could find opportu- 
nity, and finally was compelled to shovel gravel to get a crust for 
his children. He worked at this all last week, and on Saturday 



236 PROTECTION OE FREE TRADE? 

night was brought home in a wagon, -onable to walk. This morning 
he was dead. An investigation of the affair established the fact that 
the man had starved to death. The family had been without food 
for nearly two weeks. His wife tells a horrible story of his death, 
saying that while he lay dying his children surrounded his couch and 
sobbed piteously for bread. 

And here is the typical comment which the Ifew Torlk 
Tribune, shocked for a moment out of its attempt to con- 
vince working-men that the tariff has improved their 
condition, makes upon this item : 

STARVED TO DEATH. 

The Tribune, Tuesday, laid before its readers a very sad story of 
death by literal starvation, at Dayton, O. The details of this case 
must have struck many thoughtful persons as more resembling the 
catastrophes we are accustomed to regard as appertaining to Euro- 
pean life than those indigenous here. The story is old enough in 
general outline. First, a merchant, prospering; then decline of 
business, bankruptcy, and by degrees destitution, until pride and 
shame together brought on the culminating disaster. A few years 
ago it would have been said that such a fact was impossible in 
America, and certainly there was a time when no one with power 
and will to work need have starved in any part of this coimtry. 
During that period, too, the strong elasticity and recuperative 
power of Americans were the world's wonder. No man thought 
much of failure in business. The demand for enterprise of all kinds 
was such that no man of ordinary pluck and energy could be kept 
down. Perhaps this ability to recover was not so much a national 
peculiarity as an effect of the existing state of society. Certainly, 
as things settle more and more into regular grooves in the older 
States, the parallel between American and European civilization 
becomes closer, and the social problems which perplex those societies 
are beginning to overshadow this one also. Competition in our 
centers of population narrows more and more the field of unmoneyed 
enterprise. It is no longer so easy for those who fall to rise again. 
And social conventions fetter men more and tend to hold them 
within narrower bounds. 

The poor fellow who starved to death at Dayton the other day 
suffered an Old-World fate. He was down and could not get up. 



THE REAL WEAKNESS OF FREE TRADE. 237 

He was deprived of his old resources and could not invent new 
ones. His large family increased his difficulties. He could not 
compete successfully with younger and less handicapped contem- 
poraries, and so he sank, as thousands have done in the great capitals 
of Europe, but as hitherto very few, it is to be hoped, have sunk in 
an American community. Yet this is the tendency of a rapid 
increase of population and wealth. The struggle becomes fiercer 
all the time ; and while the exactions of society enslave and hamper 
the ambitious increasingly, the average fertility of resource and 
swift adaptability decline, just as the average skill of workmen de- 
clines with the perfection of mechanical appliances. Commerce 
and the artificial requirements of social tyranny have already edu- 
cated among us a class of people whose lives are a perpetual struggle 
and as perpetual an hypocrisy. They could live comfortably if they 
could give up display, but they cannot do it, and so they make 
themselves wretched and demoralize themselves at the same time. 
The soimd, healthy American characteristics are being eliminated 
in this way, and we are rearing up instead a generation of feeble 
folks who may in turn become the parents of such hewers of wood 
and drawers of water as the Old- World city masses have long been. 
And here, as there, our remedy and regeneration must come from the 
more vigorous and better-trained products of the country life. 

I will not ask how regeneration is to come from the 
more vigorous products of the country life, when every 
census shows a greater and greater proportion of our 
population concentrating in cities, and when country 
roads to the remotest borders are filled with tramps. I 
merely reprint this article as a sample of the recognition 
one meets everywhere, even on the part of those who 
foiTnaUy deny it, of the obvious fact, that it is becoming 
harder and harder for the man who has nothing but his 
own exertions to depend on to get a living in the United 
States. This fact destroys the assumption that our 
protective tariff raises and maintains wages, but it also 
makes it impossible to assume that the abolition of pro- 
tection would in any way alter the tendency which as 
wealth increases makes the struggle for existence harder 
and harder. This tendency shows itself throughout the 



238 PROTECTION OR FREE TRADE? 

civilized world, and arises from the more unequal dis- 
tribution which everywhere accompanies the increase of 
wealth. How could the abolition of protection affect it ? 
The worst that can, in this respect, be said of protection 
is that it somewhat accelerates this tendency. The best 
that could be promised for the abolition of protection is 
that it might somewhat restrain it. In England the 
same tendency has continued to manifest itself since the 
abolition of protection, despite the fact that in other 
ways great agencies for the relief and elevation of the 
masses have been at work. Increased emigration, the 
greater diffusion of education, the growth of trades-unions, 
sanitary improvements, the better organization of charity, 
and governmental regulation of labor and its conditions 
have during all these years directly tended to improve 
the condition of the working-class. Yet the depths of 
poverty are as dark as ever, and the contrast between 
want and wealth more glaring. The Corn-Law 
Reformers thought to make hunger impossible, but 
though the corn-laws have long since been abolished, 
starvation still figures in the mortuary statistics of a 
country overflowing with wealth. 

While "statisticians" marshal figures to show to 
Dives's satisfaction how much richer Lazarus is becom- 
ing, here is what the Congregational clergymen of the 
greatest and richest of the world's great cities declare in 
their " Bitter Cry of Outcast London " : 



While we have been building our ehiirches and solacing ourselves 
with our religion and dreaming that the millennium was coming, 
the poor have been growing poorer, the wretched more miserable 
and the immoral more corrupt. The gulf has been daily widening 
which separates the lowest classes of the community from our 
churches and chapels and from all decency and civilization. It is 
easy to bring an array of facts which seem to point to the opposite 
conclusion. But what does it all amount tof We are simply living 



( 



THE REAL WEAKNESS OP FREE TRADE. 239 

in a fools* paradise if we imagine that all these agencies combined 
are doing a thousandth part of what needs to be done. We must 
face the facts, and these compel the conclusion that this terrible 
flood of sin and misery is gaining on us. It is rising every day. 

This is everywhere the testimony of disinterested and 
sympathetic observers. Those who are raised above the 
fierce struggle may not realize what is going on beneath 
them. But whoever chooses to look may see. 

And when we take into account longer periods of time 
than are usually considered in discussions as to whether 
the condition of the working-man has or has not 
improved with improvement in productive agencies and 
increase in wealth, here is a great broad fact : 

Five centuries ago the wealth-producing power of 
England, man for man, was small indeed compared with 
what it is now. Not merely were all the great inventions 
and discoveries which since the introduction of steam 
have revolutionized mechanical industry then undreamed 
of, but even agriculture was far ruder and less produc- 
tive. Artificial grasses had not been discovered. The 
potato, the carrot, the turnip, the beet, and many other 
plants and vegetables which the farmer now finds most 
prolific, had not been introduced. The advantages which 
ensue from rotation of crops were unknown. Agricul- 
tural implements consisted of the spade, the sickle, the 
flail, the rude plow and the harrow. Cattle had not been 
bred to more than one-half the size they average now, 
and sheep did not yield half the fleece. Roads, where 
there were roads, were extremely bad, wheel vehicles 
scarce and rude, and places a hundred miles from each 
other were, in difficulties of transportation, practically as 
far apart as London and Hong Kong, or San Francisco 
and New York, are now. 

Yet patient students of those times— such men as Pro- 
fessor Thorold Rogers, who has devoted himself to the 



240 PROTECTION OE FREE TRADE? 

history of prices, and has deciphered the records of col- 
leges, manors and public offices— tell us that the condition 
of the English laborer was not only relatively, but abso- 
lutely better in those rude times than it is in England 
to-day, after five centuiies of advance in the productive 
arts. They tell us that the working-man did not work so 
hard as he does now, and lived better; that he was 
exempt from the harassing dread of being forced by loss 
of employment to want and beggary, or of leaving a 
family that must apply to charity to avoid starvation. 
Pauperism as it prevails in the rich England of the ntne- 
teenth century was in the far poorer England of the 
fourteenth century, absolutely unknown. Medicine was 
empirical and superstitious, sanitary regulations and 
precautions were aU but unknown. There was fre- 
quently plague and occasionally famine, for, owing to the 
difficulties of transportation, the scarcity of one district 
could not be relieved by the plenty of another. But 
men did not, as they do now, starve in the midst of 
abundance; and what is perhaps the most significant 
fact of all is that not only were women and children not 
worked as they are to-day, but the eight-hour system, 
which even the working-classes of the United States, 
with all the profusion of labor-saving machinery and 
appliances, have not yet attained, was then the common 
system ! 

If this be the result of five centuries of such increase in 
productive power as has never before been known in the 
world, what ground is there for hoping that the mere 
abolition of protective tariffs would permanently benefit 
working-men ? 

And not merely do facts of this kind prevent us from 
assuming that the abolition of protection could more than 
temporarily benefit working-men, but they suggest the 



THE REAL WEAKNESS OP FREE TRADE. 241 

qnestion, whether it could more than temporarily increase 
the production of wealth ? 

Inequality in the distribution of wealth tends to lessen 
the production of wealth— on the one side, by lessening 
intelligence and incentive among workers ; and, on the 
other side, by augmenting the number of idlers and those 
who minister to them, and by increasing vice, crime and 
waste. Now, if increase in the production of wealth tends 
to increase inequality in distribution, not only shall we be 
mistaken in expecting its full effect from anything which 
tends to increase production, but there may be a point at 
which increased inequality of distribution will neutralize 
increased power of production, just as the carrying of too 
much sail may deaden a ship's way. 

Trade is a labor-saving method of production, and the 
effect of tariff restrictions upon trade is unquestionably to 
diminish productive power. Yet, important as may be the 
effects of protection in diminishing the production of 
wealth, they are far less important than the waste of pro- 
ductive forces which is commonly attributed to the very 
excess of productive power. The existence of protective 
tariffs will not suffice to explain that paralysis of indus- 
trial forces which in all departments of industry seems to 
arise from an excess of productive power, over the demand 
for consumption, and which is everywhere leading to com- 
binations to restrain production. And considering this, 
can we feel quite sure that the effect of abolishing protec- 
tion would be more than temporarily to increase the pro- 
duction of wealth? 



CHAPTER XXin. 

THE REAL STRENGTH OP PROTECTION. 

THE pleas for protection are contradictory and absurd ; 
the books in which it is attempted to give it the 
semblance of a coherent system are confused and illogical* 

But we all know that the reasons men give for their con- 
duct or opinions are not always the true reasons, and that 
beneath the reasons we advance to others or set forth to 
ourselves there often lurks a feeling or perception which 
we may but vaguely apprehend or may even be uncon- 
scious of, but which is in reality the determining factor, 

I have been at pains to examine the arguments by which 

* The latest apology for protection, " Protection vs. Free Trade 
—the scientific validity and economic operation of defensive duties 
in the United States," by ex-Governor Henry M. Hoyt of Pennsyl- 
vania (New York, 1886), is hardly below the average in this respect, 
yet in the very preface the author discloses his equipment for eco- 
nomic investigation by talking of value as though it were a measure 
of quantity, and supposing the case of a farmer who has $3500 worth 
of produce tchich he cannot sell or barter. With this beginning it is 
hardly to be wondered at that the 420 pages of his work bring him 
to the conclusion, which he prints in italics, that " the nearer we 
come to organizing and conducting our competing industries as if 
we were the only nation on the planet, the more we shall make and 
the more we shall have to divide among the makers." An asteroid 
of about the superficial area of Pennsylvania would doubtless seem 
the most desirable of worlds to this protectionist statesman and 
philosopher. 

2«2 



THE REAL STEENGTH OP PROTECTION. 243 

protection is advocated or defended, and this has been 
necessary to our inquiry, just as it is necessary that an ad- 
vancing army should first take the outworks before it can 
move on the citadel. Yet though these arguments are not 
merely used controversially, but justify their faith in pro- 
tection to protectionists themselves, the real strength of 
protection must be sought elsewhere. 

One needs but to talk with the rank and file of the sup- 
porters of protection in such a way as to discover their 
thoughts rather than their arguments, to see that beneath 
all the reasons assigned for protection there is something 
which gives it vitality, no matter how clearly those reasons 
may be disproved. 

The truth is, that the fallacies of protection draw their 
real strength from a great fact, which is to them as the 
earth was to the fabled Antaeus, so that they are beaten 
down only to spring up again. This fact is one which 
neither side in the controversy endeavors to explain— 
which free traders quietiy ignore and protectionists quietiy 
utilize ; but which is of all social facts most obvious and 
important to the working-classes— the fact that as soon, 
at least, as a certain stage of social development is reached, 
there are more laborers seeking employment than can find 
it— a surplus which at recurring periods of industrial de- 
pression becomes very large. Thus the opportunity of 
work comes to be regarded as a privilege, and work itself 
to be deemed in common thought a good.* 



* The getting of work, not the getting of the resnlts of work, is 
assumed by protectionist writers to be the end at which a true 
national policy should aim, though for obvious reasons they do not 
dwell upon this notion. Thus, Professor Thompson says (p. 211, 
"Political Economy") : 

"The [free-trade] theory assumes that the chief end of national 
as of individual economy is to sav** labor, whereas the great problem 
is how to employ it productively. If buying in the cheapest market 



244 PROTECTION OR FREE TRADE? 

Here, and not in the labored arguments which its advo- 
cates make or in the power of the special interests which 
it enlists, lies the real strength of protection. Beneath all 
the mental habits I have spoken of as disposing men to ac- 
cept the fallacies of protection lies one stiU more impor- 
tant—the habit ingrained in thought and speech of looking 
upon work as a boon. 

Protection, as we have seen, operates to reduce the 
power of a community to obtain wealth— to lessen the re- 
sult which a given amount of exertion can secure. It 
" makes more work," in the sense in which Pharaoh made 
more work for the Hebrew brickmakers when he refused 
them straw ; in the sense in which the spilling of grease 
over her floor makes more work for the housewife, or the 
rain that wets his hay makes more work for the farmer. 

Yet, when we prove this, what have we proved to men 
whose greatest anxiety is to get work ; whose idea of good 
times is that of times when work is plentiful ? 

A rain that wets his hay is to the farmer clearly an in- 
jury ; but is it an injury to the laborer who gets by reason 
of it a day's work and a day's pay that otherwise he would 
not have got? 

The spilling of grease upon her kitchen floor may be a 
bad thing for the housewife ; but to the scrubbing woman 
who is thereby enabled to earn a needed half-dollar it may 
be a godsend. 

Or if the laborers on Pharaoh's public works had been 
like the laborers on modern public works, anxious only 
that the job might last, and if outside of them had been a 
mass of less fortunate laborers, pressing, struggling, beg- 

reduce the amount of employment, it will be, for the nation that does 
it, the dearest of all buying." Or, again (p. 235) : " The national 
economy of labor consists, not in getting on with as little as possible, 
but in finding remunerative employment for as much of it as pos- 
aible." 



THE REAL STRENGTH OF PROTECTION. 245 

ging for employment in the brick-yards— would the edict 
that, by reducing the productiveness of labor, made more 
work have really been unpopular ? 

Let us go back to Robinson Crusoe. In speaking of hitn 
I purposely left out Friday. Our protectionist might have 
talked until he was tired without convincing Crusoe that 
the more he got and the less he gave in his exchange with 
passing ships the worse off he would be. But if he had 
taken Friday aside, recalled to his mind how Crusoe had 
sold Xury into slavery as soon as he had no further use 
for him, even though the poor boy had helped him escape 
from the Moors and had saved his life, and then had 
whispered into Friday's ear that the less work there was 
to do the less need would Crusoe have of him and the 
greater the danger that he might give him back to the 
cannibals, now that he was certain to have more congenial 
companions— would the idea that there might be danger 
in a deluge of cheap goods have seemed so ridiculous to 
Friday as it did to Crusoe ? 

Those who imagine that they can overcome the popular 
leaning to protection by pointing out that protective tariffs 
make necessary more work to obtain the same result, 
ignore the fact that in all civilized countries that have 
reached a certain stage of development the majority of the 
people are unable to employ themselves, and, unless they 
find some one to give them work, are helpless, and, hence, 
are accustomed to regard work as a thing to be desired in 
itself, and anything which makes more work as a bene- 
fit, not an injury. 

Here is the rock against which "free traders" whose 
ideas of reform go no further than " a tariff for revenue 
only " waste their strength when they demonstrate that the 
effect of protection is to increase work without increasing 
wealth. And here is the reason why, as we have seen in 
the United States, in Canada and in Australia, the disposi- 



246 PROTECTION OR FREE TRADE! 

tion to resort to protective tariffs increases as that early 
stage in which there is no difiBculty of finding employment 
is passed, and the social phenomena of older countries 
begin to appear.* 

There never yet lived a man who wanted work for its 
own sake. Even the employments, constructive or destruc- 
tive, as may be, in which we engage to exercise our facul- 
ties or to dissipate ennui, must to please us show result. It 
is not the mere work of felling trees that tempts Mr. Glad- 
stone to take up his ax as a relief from the cares of state 
and the strain of politics. He could get as much work- 
in the sense of exertion— from pounding a sand-bag with 



* The growth of the protective spirit as social development goes on, 
which has been very obvious in the United States, is generally 
attributed to the influence of the manufacturing interests which 
begin to arise. But observation has convinced me that this cause 
is inadequate, and that the true explanation lies in habits of thought 
engendered by the greater difficulties of finding employment. I am 
satisfied, for instance, that protection is far stronger in California 
than it was in the earlier days of that State. But the Calif omian 
industries that can be protected by a national tariff are yet insignifi- 
cant as compared with industries that cannot be protected. But when 
tramps abound and charity is invoked for relief works, one need 
not go far to find an explanation of the growth of a sentiment which 
favors the policy of "keeping work in the country." Nothing can 
be clearer than that our protective tariff adds largely to the cost of 
nearly everything that the American farmer has to buy, while adding 
little, if anything, to the price of what he has to sell, and it has been 
a favorite theory with those who since the war have been endeavor- 
ing to arouse sentiment against protection that the attention of the 
agricultural classes only needed to be called to this to bring out an 
overwhelming opposition to protective duties. But with all the 
admirable work that has been done in this direction, it is hard to 
see any result. The truth is, as may be discovered by talking with 
farmers, that the average farmer feels that "there are already too 
many people in farming," and hence is not ill disposed toward a 
policy which, though it may increase the prices he has to pay, claims 
to "make work" in other branches of industry. 



THE REAL STRENGTH OF PROTECTION. 247 

a wooden mallet. But he could no more derive pleasure 
from this than the man who enjoys a brisk walk could find 
like enjoyment in tramping a treadmill. The pleasure is 
in the sense of accomplishment that accompanies the work 
—in seeing the chips fly and the great tree bend and fall 

The natural inducement to the work by which human 
wants are supplied is the produce of that work. But our 
industrial organization is such that what large numbers of 
men expect to get by work is not the produce or any pro- 
portional share of the produce of their work, but a fixed 
sum which is paid to them by those who take for their own 
uses the produce of their work. This sum takes to them 
the place of the natural inducement to work, and to obtain 
it becomes the object of their work. 

Now the very fact that without compulsion no one will 
work unless he can get something for it, causes, in common 
thought, the idea of wages to become involved in the idea 
of work, and leads men to think and speak of wanting work 
when what they really want are the wages that are to be 
got by work. But the fact that these wages are based upon 
the doing of work, not upon its productiveness, dissociates 
the idea of return to the laborer from the idea of the actual 
productiveness of his labor, throwing this latter idea into 
the background or eliminating it altogether. 

In our modern civilization the masses of men possess 
only the power to labor. It is true that labor is the pro- 
ducer of all wealth, in the sense of being the active factor 
of production ; but it is useless without the no less neces- 
sary passive factor. With nothing to exert itself upon, 
labor can produce nothing, and is absolutely helpless. 
And so, the men who have nothing but the power to labor 
must, to make that power of any use to them, either hire 
the material necessary to the exertion of labor, or, as is the 
prevailing method in our industrial organization, sell their 
labor to those who have the material. Thus it comes that 



248 PROTECTION OR FREE TRADEt 

the majority of men must find some one who will set them 
to work and pay them wages, he keeping as his own what 
their expenditure of labor produces. 

We have seen how in the exchange of commodities 
through the medium of money the idea arises, almost in- 
sensibly, that the buyer confers an obligation upon the 
seller. But this idea attaches to the buying and selling of 
labor with greater clearness and far greater force than to 
the buying and selling of commodities. There are several 
reasons for this. Labor will not keep. The man who 
does not sell a commodity to-day may sell it to-morrow. 
At any rate he retains the commodity. But the labor of 
the man who has stood idle to-day because no one would 
hire him cannot be sold to-morrow. The opportunity has 
gone from the man himself, and the labor that he might 
have exerted, had he found a buyer for it, is utterly lost. 
The men who have nothing but their labor are, moreover, 
the poorest class— the class who live from hand to mouth 
and who are least able to bear loss. Further than this, the 
sellers of labor are numerous as compared with buyers. 
All men in health have the power of labor, but under the 
conditions which prevail in modern civilization only a 
comparatively few have the means of employing labor, 
and there are always, even in the best of times, some 
men who find it difficult to sell their labor and who are 
thus exposed to privation and anxiety, if not to physical 
suffering. 

Hence arises the feeling that the man who employs 
another to work is a benefactor to him— a feeling which 
even the economists who have made war upon some of the 
popular delusions growing out of it have done their best 
to foster, by teaching that capital employs and maintains 
labor. This feeling runs through all classes, and colors 
all our thought and speech. One cannot read our news- 
papers without seeing that the notice of a new building or 



THE REAL STRENGTH OP PROTECTION. 249 

projected enterprise of any kind usually concludes by stat- 
ing that it will give employment to so many men, as 
though the giving of employment, the providing of work, 
were the measure of its public advantage, and something 
for which all should be grateful. This feeling, strong 
among employed, is stronger still among employers. The 
rich manufacturer, or iron-worker, or ship-builder, talks 
and thinks of the men to whom he has "given employ- 
ment " as though he had actually given something which 
entitled him to their gratitude, and he is inclined to think, 
and in most cases does think, that in combining to demand 
higher wages or less hours, or in any way endeavoring to 
put themselves in the position of freely contracting parties, 
they are snapping at the hand that has fed them, although 
the obvious fact is that such an employer's men have given 
him a greater value than he has given them, else he could 
not have grown rich by employing them. 

This habit of looking on the giving of employment as a 
benefaction and on work as a boon, lends easy currency 
to teachings which assume that work is desirable in itself 
— something which each nation ought to try to get the 
most of —and makes a system which professes to prevent 
other countries from doing for us work we might do for 
ourselves seem like a system for the enrichment of our 
own country and the benefit of its working-classes. It not 
only indisposes men to grasp the truth that protection can 
operate only to reduce the productiveness of labor ; but it 
indisposes them to care anything about that. It is the need 
for labor, not the productiveness of labor, that they are 
accustomed to look upon as the thing to be desired. 

So confirmed is this habit, that nothing is more common 
than to hear it said of a useless construction or expendi- 
ture that " it has done no good, except to provide employ- 
ment," while the most popular argument for the eight-hour 
system is that machinery has so reduced the amount of 



260 PROTECTION OR FREE TRADE! 

work to be done that there is not now enough to go around 
unless divided into smaller " takes." 

When men are thus accustomed to think and speak of 
work as desirable in itself, is it any wonder that a system 
which proposes to "make work" should easily obtain 
popularity ? 

Protectionism viewed in itself is absurd. But it is no 
more absurd than many other popular beliefs. Professor 
W. G. Sumner of Yale College, a fair representative of the 
so-called free traders who have been vainly trying to 
weaken the hold of protectionism in the United States 
without disturbing its root, essayed, before the United 
States Tariff Commission in 1882, to bring protectionism 
to a redudio ad dbsurdum by declaring that the protection- 
ist theory involved such propositions as these : that a big 
standing army would tend to raise wages by withdrawing 
men from competition in the labor-market ; that paupers 
in almshouses and convicts in prisons ought for the same 
reason to be maintained without labor ; that it is better for 
the laboring-class that rich people should live in idleness 
than that they should work; that trades-unions should 
prevent their members from lessening the supply of work 
by doing too much ; and that the destruction of property 
in riots must be a good thing for the laboring-class, by in- 
creasing the work to be done. 

But whoever will listen to the ordinary talk of men and 
read the daily newspapers, will find that, so far from such 
notions seeming absurd to the common mind, they are ac- 
customed ideas. Is it not true that the " good times dur- 
ing the war " are widely attributed to the " employment 
furnished by government " in calling so many men into the 
army, and to the brisk demand for commodities caused by 
their unproductive consumption and by actual destruction T 
Is it not true that all over the United States the working- 
classes are protesting against the employment of convicts 



THE EEAL STEENGTH OF PEOTECTION. 251 

in this, that or the other way, and would much rather have 
them kept in idleness than have them " take work from 
honest men " ? Is it not true that the rich man who " gives 
employment " to others by his lavish waste is universally 
regarded as a better friend to the workers than the rich 
man who " takes work from those who need it " by doing 
it himself ? 

In themselves these notions may be what the Professor 
declares them, " miserable fallacies which sin against com- 
mon sense," but they arise from the recognition of actual 
facts. Take the most preposterous of them. The burning 
down of a city is indeed a lessening of the aggregate 
wealth. But is the waste involved in the burning down 
of a city any more real than the waste involved in the 
standing idle of men who would gladly be at work in 
building up a city ? Where every one who needed to work 
could find opportunity, there it would indeed be clear that 
the maintenance in idleness of convicts, paupers or rich 
men must lessen the rewards of workers ; but where hun- 
dreds of thousands must endure privation because of their 
inability to find work, the doing of work by those who can 
support themselves, or wiU be supported without it, seems 
like taking the opportunity to work from those who most 
need or most deserve it. Such " miserable fallacies " must 
continue to sway men's minds until some satisfactory ex- 
planation is afforded of the facts that make the " leave to 
toil " a boon. To attempt, as do " free traders " of Profes- 
sor Sumner's class, to eradicate protectionist ideas while 
ignoring these facts, is utterly hopeless. What they take 
for a seedling that may be pulled up with a vigorous effort, 
is in reality the shoot of a tree whose spreading roots reach 
to the bed-rock of society. A political economy that will 
recognize no deeper social wrong than the framing of 
tariffs on a protective instead of on a revenue basis, and 
that, with such trivial exceptions, is but a justification of 



252 PROTECTION OR FREE TRADE t 

" things as they axe," is repellent to the instincts of the 
masses. To tell working-men, as Professor Sumner does, 
that " trades-unionism and protectionism are falsehoods," 
is simply to dispose them to protectionism, for whatever 
may be said of protection they well know that trades-unions 
have raised wages in many vocations, and that they are the 
only things that have yet given the working-classes any 
power of resisting a strain of competition that, unchecked, 
must force them to the maximum of toil for the minimum 
of pay. Such free-tradeism as Professor Sumner repre- 
sents—and it is this that is taught in England, and that in 
the United States has essayed to do battle with protection- 
ism—must, wherever the working-classes have political 
power, give to protection positive strength. 

But it is not merely by indirection that what is known 
as the " orthodox political economy " strengthens protec- 
tion. While condemning protective tariffs it has justified 
revenue tariffs, and its most important teachings have not 
merely barred the way to such an explanation of social 
phenomena as would cut the ground from under protec- 
tionism, but have been directly calculated to strengthen 
the beliefs which render protection plausible. The teach- 
ing that labor depends for employment upon capital, and 
that wages are drawn from capital and are determined by 
the ratio between the number of laborers and the amount 
of capital devoted to their employment ; —all the teachings, 
in short, which have degraded labor to the position of a 
secondary and dependent factor in production, have tended 
to sanction that view of things which disposes the labor- 
ing-class to look with favor upon anything which, by pre- 
venting the coming into a country of the produce of other 
countries, seems, at least, to increase the requirement for 
work at home. 



CHAPTER XXIV. 

THE PARADOX. 

IF our investigation has as yet led to no satisfactory 
conclusion it has at least explained why the controversy 
so long carried on between protectionists and free traders 
has been so indeterminate. The paradox we have reached 
is one toward which all the social problems of our day con- 
verge, and had our examination been of any similar ques- 
tion it must have come to just such a point. 

Take, for instance, the question of the effects of machi- 
nery. The opinion that finds most influential expression is 
that labor-saving invention, although it may sometimes 
cause temporary inconvenience or even hardship to a few, 
is ultimately beneficial to all. On the other hand, there is 
among working-men a wide-spread belief that labor-saving 
machinery is injurious to them, although, since the belief 
does not enlist those powerful special interests that are 
concerned in the advocacy of protection, it has not been 
wrought into an elaborate system and does not get any- 
thing like the same representation in the organs of public 
opinion. 

Now, should we subject this question to such an exami- 
nation as we have given to the tariff question we should 
reach similar results. "We should find the notion that 
invention ought to be restrained as incongruous as the 
notion that trade ought to be restrained— as incapable of 

253 



254 PROTECTION OR FREE TRADE! 

being carried to its logical conclusions without resulting 
in absurdity. And while the use of machinery enormously 
increases the production of wealth, examination would 
show in it nothing to cause inequality in distribution. 
On the contrary, we should see that the increased power 
given by invention inures primarily to labor, and that this 
gain is so diffused by exchange that the effect of an 
improvement which increases the power of labor in one 
branch of industry must be shared by labor hi all other 
branches. Thus the direct tendency of labor-saving 
improvement is to augment the earnings of labor. Nor is 
this tendency neutralized by the fact that labor-saving 
inventions generally require the use of capital, since compe- 
tition, when free to act, must at length bring the profits of 
capital used in this way to the common level. Even the 
monopoly of a labor-saving invention, while it can seldom 
be maintained for any length of time, cannot prevent a 
large (and generally much the largest) part of the benefits 
from being diffused.* 

From this we might conclude with certainty, that the 
tendency of labor-saving improvements is to benefit all, 
and especially to benefit the working-class, and hence 
might naturally attribute any distrust of their beneficial 
effects partly to the temporary displacements which, in 
a highly organized society, any change in the forms of 
industry must cause, and partly to the increased wants 
called forth by the increased ability to satisfy want. 

Yet, while as a matter of theory it is clear that labor- 
saving inventions ought to improve the condition of all ; 
as a matter of fact it is equally clear that they do not. 

In countries like Great Britain there is still a large 
class living on the verge of starvation, and constantly 



* For a fuller examination of the effects of machinery see my 
"Social Problems." 



i 



THE PAKADOX. 255 

slipping over it— a class who have not derived the slight- 
est benefit from the immense incfease of productive 
power, since their condition never could have been any 
worse than it is— a class whose habitual condition in 
times of peace and plenty is lower, harder, more pre- 
carious and more degraded than that of any savages. 

In countries like the United States, where such a class 
did not previously exist, its development has been con- 
temporaneous with wondrous advances of labor-saving 
invention. The laws against tramps which have been 
placed upon the statute-books of our States, the restric- 
tions upon child labor which have been found necessary, 
the walking advertisements of our cities, the growing 
bitterness of the strife which working-men are forced to 
wage, indicate unmistakably that while discovery and 
invention have been steadily increasing the productive 
power of labor in every department of industry, the con- 
dition of the mere laborer has been growing worse. 

It can be proved that labor-saving invention tends to 
benefit labor, but that this tendency is in some way 
aborted is even more clearly evident in the facts of 
to-day than it was when John Stuart Mill questioned if 
mechanical invention had lightened the day's toil of any 
human being. That in some places and in some occu- 
pations there has been improvement in the condition of 
labor is true. But not only is such improvement 
nowhere commensurate with the increase of productive 
power ; it is clearly not due to it. It exists only where it 
has been won by combinations of workmen or by legal 
interference. It is trades-unions, not the increased power 
given by machinery, that have in many occupations in 
Great Britain reduced hours and increased pay; it is 
legislation, not any improvement in the general condi- 
tion of labor, that has stopped the harnessing of women 
in mines and the working of little children in mills and 



256 PROTECTION OR FREE TRADE? 

brick-yards. Where sueli influences have not been felt, it 
is not only certain that labor-saving inventions have not 
improved the condition of labor, but it seems as if they 
had exerted a depressing effect— operating to make labor 
a drug instead of to make it more valuable. 

Thus, in relation to the effects of machinery, as in 
relation to the effects of tariffs, there are two sides to the 
shield. Conclusions to which we are led by a considera- 
tion of principles are contradicted by conclusions we are 
compelled to draw from existing facts. But, while dis- 
cussion may go on interminably between those who, 
looking only at one side of the shield, refuse to consider 
what their opponents see, yet to recognize the contradic- 
tory aspects of such a question is to realize the possibility 
of an explanation that will include both. 

The problem we must solve to explain why free trade 
or labor-saving invention or any similar cause fails to 
produce the general benefits we naturally expect, is a 
problem of the distribution of wealth. When increased 
production of wealth does not proportionately benefit the 
working-classes, it must be that it is accompanied by 
increased inequality of distribution. 

In themselves free trade and labor-saving inventions 
do not tend to inequality of distribution. Yet it is pos- 
sible that they may promote such inequality, not by 
virtue of anything inherent in their tendencies, but 
through their effect in increasing production, for, as 
already pointed out, increase or decrease in the pro- 
duction of wealth may of itself, under certain circum- 
tances, alter the proportions of distribution. Let me illus- 
trate : 

Smith, a plumber, and Jones, a gas-fitter, form a part- 
nership in the usual way, and go into the business of 
plumbing and gas-fitting. In this case whatever in- 
creases or decreases the profits of the firm will affect the 



THE PARADOX. 257 

partners equally, and whether these profits be much or 
little, the proportion which each takes will be the same. 

But let us suppose their agreement to be of a kind 
occasionally made, that the plumber shall have two-thirds 
of the profits on aU plumbing done by the firm, and the 
gas-fitter two-thirds of the profits on all gas-fitting. In 
such case, every job they do will not only increase or 
decrease the profits of the firm, but, according as it is a 
job of plumbing or of gas-fitting, will directly affect the 
distribution of profits between the partners. 

Or, again, let us suppose that the partners differ in 
their ability to take risks. Smith has a family and must 
have a steady income, while Jones is a bachelor who 
could get along for some time without di*awing from 
the firm. Better to assure Smith of a living, it is agreed 
that he shall draw a fixed sum before any profits are 
distributed, and, in return for this guaranty, shall get 
only a quarter of the profits remaining. In such a case, 
increase or decrease of profits would of itself alter the 
proportions of distribution. Increase of profits would 
affect distribution in favor of Jones, and might go so far 
as to raise his share to nearly 75 per cent, and reduce 
the share of Smith to little over 25 per cent. Decrease 
of profits on the other hand would affect distribution in 
favor of Smith, and might go so far as to give him 100 
per cent., while reducing Jones's share to nothing. In 
such a case as this, any circumstance which affected the 
amount of profits would affect the terms of distribution, 
but not by virtue of anything peculiar to the circum- 
stance. Its real cause would be something external to, 
and unconnected with, such circumstance. 

The social phenomena we have to explain resemble 
those presented in this last case. The increased in- 
equality of distribution which accompanies material 
progress is evidently connected with the increased pro- 



258 PROTECTION OR FREE TRADEf 

duction of wealth, and does not arise from any direct 
effect of the causes which increase wealth. 

Our illustration, however, yet lacks something. In the 
case we have supposed, increase of their joint profits 
would benefit both partners, though in different degrees. 
Even when Smith's share diminished in proportion, it 
would increase in amount. But in the social phenomena 
we are considering, it is not merely that with increasing 
wealth the share that some classes obtain is not increased 
proportionately ; it is that it is not increased absolutely, 
and that in some cases it is even absolutely, as well as 
proportionately, diminished. 

To get an illustration that will cover this point as well, 
let us therefore take another case. Let us go back to 
Robinson Crusoe's island, which may well serve us as an 
example of society in its simplest and therefore most 
intelligible form. 

The discovery of the island which we have heretofore 
supposed, involving calls by other ships, would greatly 
increase the wealth which the labor of its population of 
two could obtain. But it would not follow that in the 
increased wealth both would gain. Friday was Crusoe's 
slave, and no matter how much the opening of trade with 
the rest of the world might increase wealth, he could 
demand only the wages of a slave— enough to maintain 
him in working ability. So long as Crusoe himself lived 
he would doubtless take good care of the companion of 
his solitude, but when in the course of time the island 
had fully come into the circle of civilized life, and had 
passed into the possession of some heir of Crusoe's, or of 
some purchaser, living probably in England, and was 
cultivated with a view to making it yield the largest 
income, the gulf between the proprietor who owned it 
and the slave who worked upon it would not merely have 
enormously widened as compared with the time when 



THE PAEADOX. 259 

Crusoe and Friday shared with substantial equality the 
joint produce of their labor, but the share of the slave 
might have become absolutely less, and his condition 
lower and harder. 

It is not necessary to suppose positive cruelty or 
wanton harshness. The slaves who in the new order of 
things took Friday's place might have all their animal 
wants supplied— they might have as much to eat as 
Friday had, might wear better clothes, be lodged in 
better houses, be exempt from the fear of cannibals, and 
in illness have the attendance of a skilled physician. 
And seeing this, island "statisticians" might collate 
figures or devise diagrams to show how much better off 
these toilers were than their predecessor, who wore 
goatskins, slept in a cave and lived in constant dread of 
being eaten, and the conclusions of these gentlemen 
might be paraded in aU the island newspapers, with a 
chorus of: "Behold, in figures that cannot lie and dia- 
grams that can be measured, how industrial progress 
benefits everybody, even the slave ! " 

But in things of which the statistician takes no account 
they would be worse off than Friday, Compelled to a 
round of dreary toU, unlightened by variety, undignified 
by responsibility, unstimulated by seeing results and par- 
taking of them, their life, as compared with that of Friday, 
would be less that of men and more that of machines. 

And the effect of such changes would be the same 
upon laborers such as we call free— free, that is to say, 
to use their own power to labor, but not free to that 
which is necessary to its use. If Friday, instead of set- 
ting Crusoe's foot upon his head, in token that he was 
thenceforward his slave, had simply acknowledged 
Crusoe's ownership of the island, what would have been 
the difference? As he could live upon Crusoe's prop- 
erty only on Crusoe's terms, his freedom would simply 



260 PROTECTION OR FREE TRADE! 

have amounted to the freedom to emigrate, to drown 
himself in the sea, or to give himseK up to the cannibals. 
Men enjoying only such freedom— that is to say, the 
freedom to starve or emigrate as the alternative of get- 
ting some one else's permission to labor— cannot be 
enriched by improvements that increase the production 
of wealth. For they have no more power to claim any 
share of it than has the slave. Those who want them to 
work must give them what the master must give the 
slave if he wants him to work— enough to support life 
and strength ; but when they can find no one who wants 
them to work they must starve, if they cannot beg. 
Grant to Crusoe ownership of the island, and Friday, the 
free man, would be as much subject to his will as Friday, 
the slave; as incapable of claiming any share of an 
increased production of wealth, no matter how great it 
might be nor from what cause it might come. 

And what would be true in the case of one man would 
be true of any number. Suppose ten thousand Fridays, 
all free men, all absolute owners of themselves, and but 
one Crusoe, the absolute owner of the island. So long 
as his ownership was acknowledged and could be 
enforced, would not the one be the master of the ten 
thousand as fully as though he were the legal owner of 
their flesh and blood ? Since no one could use his island 
without his consent, it would follow that no one could 
labor, or even live, without his permission. The order, 
"Leave my property," would be a sentence of death. 
This owner of the island would be to the other ten thou- 
sand " free men " who lived upon it, their land lord or 
land god, of whom they would stand in more real awe 
than of any deity that their religion taught them reigned 
above. For as a Scottish landlord told his tenants: 
" God Almighty may have made the land, but I own it. 
And if you don't do as I say, off you go ! " 



THE PARADOX. 261 

No increase of wealth could enable such "free" 
laborers to claim more than a bare living. The opening 
up of foreign trade, the invention of labor-saving 
machines, the discovery of mineral deposits, the intro- 
duction of more prolific plants, the growth of skUl, 
would simply increase the amount their land lord would 
charge for the privilege of living on his island, and could 
in no wise increase what those who had nothing but their 
labor could demand. If Heaven itself rained down 
wealth upon the island that wealth would be his. And 
so, too, any economy that might enable these mere 
laborers to live more cheaply would simply increase the 
tribute that they could pay and that he could exact. 

Of course, no man could utilize a power like this to 
its full extent or for himself alone. A single landlord in 
the midst of ten thousand poor tenants, like a single 
master amid ten thousand slaves, would be as lonely as 
was Robinson Crusoe before Friday came. The human 
being is by nature a social animal, and no matter how 
selfish such a man might be, he would desire companions 
nearer his own condition. Natural impulse would 
prompt him to reward those who pleased him, prudence 
would urge him to interest the more influential among 
his ten thousand Fridays in the maintenance of his 
ownership, while experience would show him, if calcula- 
tion did not, that a larger income could be obtained by 
leaving to superior energy, skill and thrift some part of 
what their efforts secured. But while the single owner 
of such an island would thus be induced to share his 
privileges by means of grants, leases, exemptions or 
stipends, with a class more or less numerous, who would 
thus partake with him in the advantages of any improve- 
ment that increased the power of producing wealth, there 
would yet remain a class, the mere laborers of only ordi- 
nary ability, to whom such improvement could bring no 



262 PKOTECTION OR FREE TRADE! 

benefit. And it would only be necessary to be a little 
chary in granting permission to work upon the island, so 
as to keep a small percentage of the population con* 
stantiy on the verge of starvation and begging to be 
permitted to use their power to labor, to create a com- 
petition in which, bidding against each other, men would 
of themselves offer all that their labor could procure 
save a bare living, for the privilege of getting that. 

We can sometimes see principles all the clearer if we 
imagine them brought out under circumstances to which 
we are not habituated ; but, as a matter of fact, the social 
adjustment which in modem civilization creates a class 
who can neither labor nor live save by permission of 
others, never could have arisen in this way. 

The reader of " The Further Adventures of Robinson 
Crusoe," as related by De Foe, will remember that during 
Crusoe's long absence, the three English rogues, led by 
Will Atkins, set up a claim to the ownership of the 
island, declaring that it had been given to them by 
Robinson Crusoe, and demanding that the rest of the 
inhabitants should work for them by way of rent. 
Though used in their own countries to the acknowledg- 
ment of just such claims, set up in the name of men 
gone, not to other lands, but to another world, the Span- 
iards, as weU as the peaceable Englishmen, laughed at 
this demand, and, when it was insisted on, laid Will 
Atkins and his companions by the heels until they had 
got over the notion that other people should do their 
work for them. But if the three English rogues had got 
possession of all the firearms before asserting their claim 
to own the island, the rest of its population might have 
been compelled to acknowledge it. Thus a class of 
landowners and a class of non-landowners would have 
been established, to which arrangement the whole popu- 
lation might in a few generations have become so habitu- 



I 



THE PARADOX. 263 

ated as to think it the natural order, and when they had 
begun, in course of time, to colonize other islands, they 
would have established the same institution there. Now, 
what might thus have happened on Crusoe's island, had 
the three English rogues got possession of all the fire- 
arms, is precisely what on a larger scale, did happen in 
the development of European civilization, and what is 
happening in its extension to other parts of the world. 
Thus it is that we find in civilized countries a large class 
who, while they have power to labor, are denied any 
right to the use of the elements necessary to make that 
power available, and who, to obtain the use of those 
elements, must either give up iu rent a part of the prod- 
uce of their labor, or take in wages less than their labor 
yields. A class thus helpless can gain nothing from 
advance in productive power. Where such a class exists, 
increase in the general wealth can only mean increased 
inequality in distribution. And though this tendency 
may be a little checked as to some of them by trades- 
unions or similar combinations which artificially lessen 
competition, it wiQ operate to the full upon those outside 
of such combinations. 

And, let me repeat it, this increased inequaUty in dis- 
tribution does not mean merely that the mass of those 
who have nothing but the power to labor do not propor- 
tionately share in the increase of wealth. It means that 
their condition must become absolutely, as well as 
relatively, worse. It is in the nature of industrial 
advance— it is of the very essence of those prodigious 
forces which modern invention and discovery are unloos- 
ing, that they must injure where they do not benefit. 
These forces are not in themselves either good or evil. 
They .bring good or evil according to the conditions 
under which they are exerted. In a state of society in 
which all men stood upon an equality with relation to the 



264 PROTECTION OR FREE TRADE? 

use of the material universe their effects could be only 
beneficent. But in a state of society in which some men 
are held to be the absolute owners of the material uni- 
verse, while other men cannot use it without paying 
tribute, the blessing these forces might bring is changed 
into a curse— their tendency is to destroy independence, 
to dispense with skill and convert the artisan into a 
"hand," to concentrate all business and make it harder 
for an employee to become his own employer, and to 
compel women and children to injurious and stunting 
toil. The change industrial progress is now working in 
the conditions of the mere laborer, and which is only 
somewhat held in check by the operations of trades- 
unions, is that change which would convert a slave who 
shared the varied occupations and rude comforts of his 
goatskin-clothed master into a slave held as a mere 
instrument of factory production. Compare the skilled 
craftsman of the old order with the operative of the new 
order, the mere feeder of a machine. Compare the 
American farm "help" of an earlier state, the social 
equal of his employer, with the cow-boy, whose dreary 
life is enlivened only by a "round-up" or "drunk," or 
with the harvest hand of the " wheat factory," who sleeps 
in barracks or barns, and after a few months of employ- 
ment goes on a tramp. Or compare the poverty of 
Connemara or Skye with the infinitely more degraded 
poverty of Belfast or Glasgow. Do this, and then say 
if to those who can hope to sell their labor only for a 
subsistence, our very industrial progress has not a dark 
side. 

And that this must be the tendency of labor-saving 
invention or reform in a society where the planet is held 
to be private property, and the children that come into 
life upon it are denied all right to its use except as they 
buy or inherit the title of some dead man, we may see 



THE PARADOX. 266 

plainly if we imagine labor-saving invention carried to 
its furthest imaginable extent. When we consider that 
the object of work is to satisfy want, the idea that labor- 
saxing invention can ever cause want by making work 
more productive seems preposterous. Yet, could inven- 
tion go so far as to make it possible to produce wealth 
without labor, what would be the effect upon a class who 
can call nothing their own, save the power to labor, and 
who, let wealth be never so abundant, can get no share 
of it except by selling this power? Would it not be to 
reduce to naught the value of what this class have to 
seU ; to make them paupers in the midst of aU possible 
wealth— to deprive them of the means of earning even a 
poor livelihood, and to compel them to beg or starve, if 
they could not steal ? Such a point it may be impossible 
for invention ever to reach, but it is a point toward 
which modern invention drives. And is there not in 
this some explanation of the vast army of tramps and 
paupers, and of deaths by want and starvation in the 
very midst of plenty ? 

The abolition of protection would tend to increase the 
production of wealth— that is sure. But under condi- 
tions that exist, increase in the production of wealth may 
itself become a curse— first to the laboring-class, and 
ultimately to society at large. 

Is it not true, then, it may be asked, that protection, 
for the reason at least that it does check that freedom 
and extension of trade which are essential to the full 
play of modem industrial tendencies, is favorable to the 
working-classes? Much of the strength of protection 
among working-men comes, I think, from vague feelings 
of this kind. 

My reply would be negative. Not only has protection 
— which is merely the protection of producing capitalists 
against foreign competition in the home market— ten- 



266 PROTECTION OR FREE TRADE? 

dencies in itself toward monopoly and inequality, but it 
is impotent to cheek the concentrating tendencies of 
modem inventions and processes. To do this by " pro- 
tection " we must not only forbid foreign commerce, but 
restrain internal commerce. We must not only prohibit 
any new applications of labor-saving invention, but must 
prevent the use of the most important of those already 
adopted. We must tear up the railway and go back to 
the canal-boat and f reight- wagon ; cut down the tele- 
graph-wire and rely upon the post-horse ; substitute the 
scythe for the reaper, the needle for the sewing-machine, 
the hand-loom for the factory; in short, discard all that 
a century of invention has given us, and return to the 
industrial processes of a hundred years ago. This is as 
impossible as for the chicken to go back to the egg. A 
man may become decrepit and childish, but once man- 
hood is reached he cannot again become a chUd. 

No ; it is not in going backward, it is in going forward, 
that the hope of social improvement lies. 



CHAPTER XXV. 

THE ROBBER THAT TAKES ALL THAT IS LEFT. 

IN itseK the abolition of protection is like the driving 
off of a robber. 

But it will not help a man to drive off one robber, if 
another, stiU stronger and more rapacious, be left to 
plunder him. 

Labor may be likened to a man who as he carries 
home his earnings is waylaid by a series of robbers. 
One demands this much, and another that much, but last 
of all stands one who demands all that is left, save just 
enough to enable the victim to maintain life and come 
forth next day to work. So long as this last robber 
remains, what will it benefit such a man to drive off any 
or all of the other robbers ? 

Such is the situation pf labor to-day throughout the 
civilized world. And the robber that takes aU that is 
left, is private property in land. Improvement, no 
matter how great, and reform, no matter how beneficial 
in itself, cannot help that class who, deprived of all right 
to the use of the material elements, have only the power 
to labor— a power as useless in itself as a sail without 
wind, a pump without water, or a saddle without a horse. 

I have likened labor to a man beset by a series of 
robbers, because there are in every country other things 
than private property in land which tend to diminish 

267 



268 PROTECTION OR FREE TRADE? 

national prosperity and divert the wealth earned by 
labor into the hands of non-producers. This is the ten- 
dency of monopoly of the processes and machinery of 
production and exchange, the tendency of protective 
tariffs, of bad systems of currency and finance, of cor- 
rupt government, of public debts, of standing armies, 
and of wars and preparations for war. But these things, 
some of which are conspicuous in one country and some 
in another, cannot account for that impoverishment of 
labor which is to be seen everywhere. They are the 
lesser robbers, and to drive them off is only to leave 
more for the great robber to take. 

If the all-sufficient cause of the impoverishment of 
labor were abolished, then reform in any of these direc- 
tions would improve the condition of labor ; but so long 
as that cause exists, no reform can effect any permanent 
improvement. Public debts might be abolished, stand- 
ing armies disbanded, war and the thought of war forgot- 
ten, protective tariffs everywhere discarded, government 
administered with the greatest purity and economy, and 
all monopolies, save the monopoly of land, destroyed, 
without any permanent improvement in the condition of 
the laboring-class. For the economic effect of all these 
reforms would simply be to diminish the waste or 
increase the production of wealth, and so long as com- 
petition for employment on the part of men who are 
powerless to employ themselves tends steadily to force 
wages to the minimum that gives the laborer but a bare 
living, this is all the ordinary laborer can get. So long 
as this tendency exists— and it must continue to exist so 
long as private property in land exists— improvement 
(even if possible) in the personal qualities of the laboring 
masses, such as improvement in skill, in intelligence, in 
temperance or in thrift, cannot improve their material 
condition. Improvement of this kind can benefit the 



THE ROBBER THAT TAKES ALL THAT IS LEFT. 269 

individual only while it is confined to the individual, and 
thus gives him an advantage over the body of ordinary 
laborers whose wages form the regulative basis of all 
other wages. K such personal improvements become 
general the effect can only be to enable competition to 
force wages to a lower level. Where few can read and 
write, the ability to do so confers a special advantage 
and raises the individual who possesses it above the level 
of ordinaiy labor, enabling him to command the wages 
of special skill. But where aU can read and write, the 
mere possession of this ability cannot save ordinary 
laborers from being forced to as low a position as though 
they could not read and write. 

And so, where thriftlessness or intemperance prevails, 
the thrifty or temperate have a special advantage which 
may raise them above the conditions of ordinary labor ; 
but should these virtues become general that advantage 
would cease. Let the great body of working-men so 
reform or so degrade their habits that it would become 
possible to live on one-half the lowest wages now paid, 
and that competition for employment which drives men 
to work for a bare living must proportionately reduce 
the level of wages. 

I do not say that reforms that increase the intelligence 
or improve the habits of the masses are even in this view 
useless. The diffusion of intelligence tends to make men 
discontented with a life of poverty in the midst of wealth, 
and the diminution of intemperance better fits them to 
revolt against such a lot. Public schools and temperance 
societies are thus prerevolutionary agencies. But they 
can never abolish poverty so long as land continues to 
be treated as private property. The worthy people who 
imagine that compulsory education or the prohibition of 
the drink traffic can abolish poverty are making the 
same mistake that the Anti-Com-Law reformers made 



270 PROTECTION OR FREE TRADE? 

when they imagined that the abolition of protection 
would make hunger impossible. Such reforms are in 
their own nature good and beneficial, but in a world like 
this, tenanted by beings like ourselves, and treated by 
them as the exclusive property of a part of their number, 
there must, under any conceivable conditions, be a class 
on the verge of stsirvation. 

This necessity inheres in the nature of things ; it arises 
from the relation between man and the external uni- 
verse. Land is the superficies of the globe— that bottom 
of the ocean of air to which our physical structure con- 
fines us. It is our only possible standing-place, our only 
possible workshop, the only reservoir from which we can 
draw material for the supply of our needs. Considering 
land in its narrow sense, as distinguished from water 
and air, it is still the element necessary to our use of the 
other elements. Without land man could not even avail 
himself of the light and heat of the sun or utilize the 
forces that pulse through matter. And whatever be his 
essence, man, in his physical constitution, is but a chang- 
ing form of matter, a passing mode of motion, con- 
stantly drawn from nature's reservoirs and as constantly 
returning to them again. In physical structure and 
powers he is related to land as the fountain-jet is related 
to the stream, or the flame of a gas-burner to the gas 
that feeds it. 

Hence, let other conditions be what they may, the man 
who, if he lives and works at all, must live and work on 
land belonging to another, is necessarily a slave or a 
pauper. 

There are two forms of slavery— that which Friday 
accepted when he placed Crusoe's foot upon his head, 
and that which Will Atkins and his comrades attempted 
to establish when they set up a claim to the ownership of 
the island and called on its other inhabitants to do all 



THE ROBBER THAT TAKES ALL THAT IS LEFT. 271 

the work. The one, which consists in making property 
of man, is resorted to only when population is too sparse 
to make practicable the other, which consists in making 
property of land. 

For while population is sparse and unoccupied land is 
plenty, laborers ai*e able to escape the necessity of buying 
the use of land, or can obtain it on nominal terms. 
Hence to obtain slaves— people who will work for you 
without your working for them in return— it is necessary 
to make property of their bodies or to resort to predial 
slavery or serfdom, which is an artificial anticipation of 
the power that comes to the landowner with denser 
population, and which consists in confining laborers to 
land on which it is desired to utilize their labor. But 
as population becomes denser and land more fully 
occupied, the competition of non-landowners for the use 
of land obviates the necessity of making property of 
their bodies or of confining them to an estate in order to 
obtain their labor without return. They themselves will 
beg the privilege of giving their labor in return for 
being permitted what must be jdelded to the slave— a 
spot to live on and enough of the produce of their own 
labor to maintain life. 

This, for the owner, is much the more convenient form 
of slavery. He does not have to worry about his slaves 
—is not at the trouble of whipping them to make them 
work, or chaining them to prevent their escape, or chas- 
ing them with bloodhounds when they run away. He is 
not concerned with seeing that they are properly fed in 
infancy, cared for in sickness or supported in old age. 
He can let them live in hovels, let them work harder and 
fare worse, than could any half-humane owner of the 
bodies of men, and this without a qualm of conscience 
or any reprobation from public opinion. In short, when 
society reaches the point of development where a brisk 



272 PROTECTION OR FREE TRADE t 

competition for the use of land springs up, the owner- 
ship of land gives more profit with less risk and trouble 
than does the ownership of men. If the two young Eng- 
lishmen I have spoken of had come over here and bought 
so many American citizens, they could not have got from 
them so much of the produce of labor as they now get by 
having bought land which American citizens are glad to 
be allowed to till for half the crop. And so, even if our 
laws permitted, it would be foolish for an English duke 
or marquis to come over here and contract for ten thou- 
sand American babies, bom or to be bom, in the expec- 
tation that when able to work he could get out of them 
a large return. For by purchasing or fencing in a 
million acres of land that cannot run away and do not 
need to be fed, clothed or educated, he can, in twenty or 
thirty years, have ten thousand full-grown Americans, 
ready to give him half of all that their labor can produce 
on his land for the privilege of supporting themselves and 
their families out of the other half. This gives him 
more of the produce of labor than he could exact from 
so many chattel slaves. And as time goes on and Ameri- 
can citizens become more plentiful, the ownership of this 
land will enable him to get more of them to work for 
him, and on lower terms. His speculation in land is as 
much a speculation in the growth of men as though he 
had bought children and contracted for infants yet to be 
born. For if infants ceased to be born and men to grow 
up in America, his land would be valueless. The profits 
on such investment do not arise from the growth of 
land or increase of its capabilities, but from growth of 
population. * 

Land in itself has no value. Value arises only from 
human labor. It is not until the ownership of land 
becomes equivalent to the ownership of laborers that 
any value attaches to it. And where land has a specula- 



THE ROBBER THAT TAKES ALL THAT IS LEFT. 273 

tive value it is because of the expectation that the growth 
of society will in the future make its ownership equiva- 
lent to the ownership of laborers. 

It is true that aU -valuable things have the quahty of 
enabling their owner to obtain labor or the produce of 
labor in return for them or for their use. But with 
things that are themselves the produce of labor such 
transactions involve an exchange— the giving of an 
equivalent of labor-produce in return for labor or its 
produce. Land, however, is not the produce of labor; 
it existed before man was, and, therefore, when the 
ownership of land can command labor or the products 
of labor, the transaction, though in form it may be an 
exchange, is in reality an appropriation. The power 
which the ownership of valuable land gives, is that of 
getting human service without giving human service, a 
power essentially the same as that power of appropria- 
tion which resides in the ownership of slaves. It is not 
a power of exchange, but a power of blackmail, such as 
would be asserted were some men compelled to pay 
other men for the use of the ocean, the air or the sun- 
light. 

The value of such things as grain, cattle, ships, houses, 
goods or metals is a value of exchange, based upon the 
cost of production, and therefore tends to diminish as 
the progress of society lessens the amount of labor neces- 
sary to produce such things. But the value of land is a 
value of appropriation, based upon the amount that can 
be appropriated, and therefore tends to increase as the 
progress of society increases production. Thus it is, as 
we see, that while aU sorts of products steadily fall in 
value, the value of land steadily rises. Inventions and 
discoveries that increase the productive power of labor 
lessen the value of the things that require labor for their 
production, but increase the value of land, since they 



274 PROTECTION OR FREE TRADE? 

increase the amount that labor can be compelled to give 
for its use. And so, where land is fully appropriated as 
private property no increase in the production of wealth, 
no economy in its use, can give the mere laborer more 
than the wages of the slave. If wealth rained down 
from heaven or weUed up from the depths of the earth 
it could not enrich the laborer. It could merely increase 
the value of land. 

Nor do we have to appeal to the imagination to see 
this. In Western Pennsylvania it has recently been 
discovered that if borings are made into the earth com- 
bustible gas wiU force itself up— a sheer donation, as it 
were, by Nature, of a thing that heretofore could be pro- 
duced only by labor. The direct and natural tendency of 
this new power of obtaining by boring and piping what 
has heretofore required the mining and retorting of coal 
is to make labor more valuable and to increase the earn- 
ings of the laborer. But land in Pennsylvania being 
treated as private property, it can have no such effect. 
Its effect, in the first place, is to enrich the owners of the 
land through which the borings must be made, who, as 
legal owners of the whole material universe above and 
below their land, can levy a toU on the use of Natures' 
gift. In the next place, the capitalists who have gone 
into the business of bringing the gas in pipes to Pitts- 
burgh and other cities have formed a combination similar 
to that of the Standard OH Company, by which they con- 
trol the sale of the natural gas, and thus over and above 
the usual returns of capital make a large profit. Still, 
however, a residue of advantage is left, for the new fuel 
is so much more easUy handled, and produces so much 
more uniform a heat, that the glass- and iron-workers of 
Pittsburgh find it more economical than the old fuel, 
even at the same cost. But they cannot long retain this 
advantage. If it prove permanent, other glass- and iron- 



THE ROBBER THAT TAKES ALL THAT IS LEFT. 275 

workers will soon be crowding to Pittsburgh to share in 
it, and the result will be that the value of city lots in 
Pittsburgh will so increase as finally to transfer this 
residual advantage to the owners of Pittsburgh land * 
And if the monopoly of the piping company is abolished, 
or if by legislative regulation its profits are reduced to 
the ordinary earnings of capital, the ultimate result will, 
in the same way, be not an advantage to workers, but an 
advantage to landowners. 

Thus it is that railways cheapen transportation only to 
increase the value of land, not the value of labor, and 
that when their rates are reduced it is landowners not 
laborers who get the benefit. So it is with aU improve- 
ments of whatever nature. The Federal Government has 
acted the part of a munificent patron to Washington 
City. The consequence is that the value of lots has 
advanced. If the Federal Government were to supply 
every Washington householder with free light, free fuel 
and free food, the value ' of lots would still further 
increase, and the owners of Washington "real estate" 
would ultimately pocket the donation. 

The primary factors of production are land and labor. 
Capital is their product, and the capitalist is but an inter- 
mediary between the landlord and the laborer. Hence 
working-men who imagine that capital is the oppressor 
of labor are " barking up the wrong tree." In the first 
place, much that seems on the surface like oppression by 
capital is in reality the result of the helplessness to which 
labor is reduced by being denied all right to the use of 
land. "The destruction of the poor is their poverty.** 

* The largest owners of Pittsburgh land are an English family 
named Schenley, who draw in ground-rents a great revenue, thus (to 
the gratification of Pennsylvania protectionists) increasing our 
exports over our imports, just as though they owned so many Penn- 
sylvanians. 



276 PROTECTION OR FREE TRABEf 

It is not in the power of capital to compel men who can 
obtain free access to nature to seU their labor for starva- 
tion wages. In the second place, whatever of the earn- 
ings of labor capitalistic monopolies may succeed in 
appropriating, they are merely lesser robbers, who take 
what, if they were abolished, landownership would take. 

No matter whether the social organization be simple or 
complex, no matter whether the intermediaries between 
the owners of land and the owners of the mere power to 
labor be few or many, wherever the available land has 
been fully appropriated as the property of some of the 
people, there must exist a class, the laborers of ordinary 
ability and skill, who can never hope to get more than a 
bare living for the hardest toil, and who are constantly 
in danger of failure to get even that. 

We see that class existing in the simple industrial 
organization of western Ireland or the Scottish High- 
lands, and we see it, stiU lower and more degraded, in 
the complex industrial organization of the great British 
cities. In spite of the enormous increase of productive 
power, we have seen it developing in the United States, 
just as the appropriation of our land has gone on. This 
is as it must be, for the most fundamental of all human 
relations is that between man and the planet he inhabits. 

How the recognition of the consequences involved in 
the division of men into a class of world-owners and a 
class who have no legal right to the use of the world 
explains many things otherwise inexplicable I cannot 
here point out, since I am dealing only with the tariff 
question. We have seen why what is miscalled "free 
trade"— the mere abolition of protection— can only tem- 
porarily benefit the working-classes, and we have now 
reached a position which will enable us to proceed with 
our inquiry and ascertain what the effects of true free 
trade would be. 



CHAPTER XXVI. 

TEUE FREE TRADE. 

" /^OME withi me," said Richard Cobden, as Jolin 

V^ Bright turned heart-stricken from a new-made 
grave. "There are in England women and children 
dying with hunger— with hunger made by the laws. 
Come with me, and we will not rest until we repeal those 
laws." 

In this spirit the free-trade movement waxed and 
grew, arousing an enthusiasm that no mere fiscal reform 
could have aroused. And intrenched though it was by 
restricted suffrage and rotten boroughs and aristocratic 
privilege, protection was overthrown in Great Britain. 

And— there is hunger in Great Britain still, and 
women and children yet die of it. 

But this is not the failure of free trade. When protec- 
tion had been abolished and a revenue tariff substituted 
for a protective tariff, free trade had won only an out- 
post. That women and children still die of hunger in 
Great Britain arises from the failure of the reformers 
to go on. Free trade has not yet been tried in Great 
Britain. Free trade in its fullness and entirety would 
indeed abolish hunger. 

This we may now see. 

Our inquiry has shown that the reason why the aboli- 
tion of protection, greatly as it would increase the pro- 

277 



278 PROTECTION OR FREE TRADE! 

duction of wealth, can accomplish no permanent benefit 
for the laboring class, is, that so long as the land on 
which aU must live is made the property of some, 
increase of productive power can only increase the 
tribute which those who own the land can demand for its 
use. So long as land is held to be the individual 
property of but a portion of its inhabitants no possible 
increase of productive power, even if it went to the 
length of abolishing the necessity of labor, and no 
imaginable increase of wealth, even though it poured 
down from heaven or gushed up from the bowels of the 
earth, could improve the condition of those who possess 
only the power to labor. The greatest imaginable 
increase of wealth could only intensify in the greatest 
imaginable degree the phenomena which we are familiar 
with as "over-production"— could only reduce the labor- 
ing-class to universal pauperism. 

Thus it is, that to make either the abolition of protec- 
tion or any other reform beneficial to the working-class 
we must abolish the inequality of legal rights to land, 
and restore to all their natural and equal rights in the 
common heritage. 

How can this be done ? 

Consider for a moment precisely what it is that needs 
to be done, for it is here that confusion sometimes arises. 
To secure to each of the people of a country his equal 
right to the land of that country does not mean to 
secure to each an equal piece of land. Save in an 
extremely primitive society, where population was sparse, 
the division of labor had made little progress, and family 
groups lived and worked in common, a division of land 
into anything like equal pieces would indeed be imprac- 
ticable. In a state of society such as exists in civilized 
countries to-day, it would be extremely difficult, if not 
altogether impossible, to make an equal division of land. 



TRUE FREE TRADK 279 

Nor would one such division suffice. With the first 
division the difficulty would only begin. Where popula- 
tion is increasing and its centers are constantly chang- 
ing; where different vocations make different uses of 
land and require different qualities and amounts of it; 
where improvements and discoveries and inventions are 
constantly bringing out new uses and changing relative 
values, a division that should be equal to-day would soon 
become very unequal, and to maintain equality a redivi- 
sion every year would be necessary. 

But to make a redivision every year, or to treat land 
as a common, where no one could claim the exclusive use 
of any particular piece, would be practicable only where 
men Hved in movable tents and made no permanent 
improvements, and would effectually prevent any ad- 
vance beyond such a state. No one would sow a crop, 
or build a house, or open a mine, or plant an orchard, or 
cut a drain, so long as any one else could come in and 
turn him out of the land in which or on which such 
improvements must be fixed. Thus it is absolutely 
necessary to the proper use and improvement of land 
that society should secure to the user and improver safe 
possession. 

This point is constantly raised by those who resent 
any questioning of our present treatment of land. They 
seek to befog the issue by persistently treating every 
proposition to secure equal rights to land as though it 
were a proposition to secure an equal division of land, 
and attempt to defend private property in land by set- 
ting forth the necessity of securing safe possession to 
the improver. 

But the two things are essentially different. 

In the first place equal rights to land could not be 
secured by the equal division of land, and in the second 
place it is iwt necessary to make land the private prop- 



280 PROTECTION OR FREE TRADET 

erty of individuals in order to secure to improvers that 
safe possession of their improvements that is needed to 
induce men to make improvements. On the contrary, 
private property in land, as we may see in any country 
where it exists, enables mere dogs in the manger to levy 
blackmail upon improvers. It enables the mere owner 
of land to compel the improver to pay him for the privi- 
lege of making improvements, and in many cases it 
enables him to confiscate the improvements. 

Here are two simple principles, both of which are self- 
evident : 

I.— That aU men have equal rights to the use and 
enjoyment of the elements provided by Nature. 

II.— That each man has an exclusive right to the use 
and enjoyment of what is produced by his own labor. 

There is no conflict between these principles. On the 
contrary they are correlative. To secure fully the 
individual right of property in the produce of labor we 
must treat the elements of nature as common property. 
If any one could claim the sunlight as his property and 
could compel me to pay him for the agency of the sun in 
the growth of crops I had planted, it would necessarily 
lessen my right of property in the produce of my labor. 
And conversely, where every one is secured the full right of 
property in the produce of his labor, no one can have any 
right of property in what is not the produce of labor. 

No matter how complex the industrial organization, 
nor how highly developed the civilization, there is no 
real difficulty in carrying out these principles. All we 
have to do is to treat the land as the joint property of 
the whole people, just as a railway is treated as the joint 
property of many shareholders, or as a ship is treated as 
the joint property of several owners. 

In other words, we can leave land now being used in 
the secure possession of those using it, and leave land 



TRUE FREE TRADE. 281 

now unused to be taken possession of by those who wish 
to make use of it, on condition that those who thus hold 
land shall pay to the community a fair rent for the 
exclusive privilege they enjoy— that is to say, a rent 
based on the value of the privilege the individual 
receives from the community in being accorded the 
exclusive use of this much of the common property, and 
which should have no reference to any improvement he 
had made in or on it, or to any profit due to the use of 
his labor and capital. In this way aU would be placed 
upon an equality in regard to the use and enjoyment of 
those natural elements which are clearly the common 
heritage, and that value which attaches to land, not 
because of what the individual user does, but because of 
the growth of the community, would accrue to the com- 
munity, and could be used for purposes of common 
benefit. As Herbert Spencer has said of it: 

Such a doctrine is consistent with the highest state of civilization ; 
may be carried out without involving a community of goods, and 
need cause no very serious revolution in existing arrangements. 
The change required would be simply a change of landlords. Sepa- 
rate ownership would merge into the joint-stock ownership of the 
public. Instead of being in the possession of individuals, the coun- 
try would be held by the great corporate body— society. ... A 
state of things so ordered would be in perfect harmony with the 
moral law. Under it all men would be equally landlords, all men 
would be alike free to become tenants. Clearly, therefore, on such 
a system the earth might be inclosed, occupied and cultivated, in 
entire subordination to the law of equal freedom. 

That this simple change would, as Mr. Spencer says, 
involve no serious revolution in existing arrangements is 
in many cases not perceived by those who think of it for 
the first time. It is sometimes said that while this prin- 
ciple is manifestly just, and while it would be easy to 
apply it to a new country just being settled, it would be 



282 PROTECTION OR FREE TRADE? 

exceedingly difficult to apply it to an already settled 
country where land had already been divided as private 
property, since, in such a country, to take possession of 
the land as common property and let it out to individuals 
would involve a sudden revolution of the greatest mag- 
nitude. 

This objection, however, is founded upon the mistaken 
idea that it is necessary to do everything at once. But 
it often happens that a precipice we could not hope to 
climb, and that we might well despair of making a 
ladder long enough and strong enough to scale, may be 
surmounted by a gentle road. And there is in this qase 
a gentle road open to us, which will lead us so far that 
the rest will be but an easy step. To make land virtually 
the common property of the whole people, and to appro- 
priate ground-rent for public use, there is a much 
simpler and easier way than that of formally assuming 
the ownership of land and proceeding to rent it out in 
lots— a way that involves no shock, that will conform to 
present customs, and that, instead of requiring a great 
increase of governmental machinery, will permit of a 
great simplification of governmental machinery. 

In every well-developed community large sums are 
needed for common purposes, and the sums thus needed 
increase with social growth, not merely in amount, but 
proportionately, since social progress tends steadily to 
devolve on the community as a whole functions which in 
a ruder stage are discharged by individuals. Now, while 
people are not used to paying rent to government, they 
are used to paying taxes to government. Some of these 
taxes are levied upon personal or movable property; 
some upon occupations or businesses or persons (as in 
the case of income taxes, which are in reality taxes on 
persons according to income) ; some upon the transporta- 
tion or exchange of commodities, in which last category 



TRUE FREE TRADE. 283 

fall the taxes imposed by tariffs; and some, in the 
United States at least, on real estate— that is to say, on 
the value of land and of the improvements upon it, 
taken together. 

That part of the tax on real estate which is assessed 
on the value of land irrespective of improvements is, in 
its nature, not a tax, but a rent— a taking for the com- 
mon use of the community of a part of the income that 
properly belongs to the community by reason of the 
equal right of all to the use of land. 

Now it is evident that, in order to take for the use of 
the community the whole income arising from land, just 
as effectually as it could be taken by formally appro- 
priating and letting out the land, it is only necessary to 
abolish, one after another, all other taxes now levied, 
and to increase the tax on land values till it reaches, as 
near as may be, the full annual value of the land. 

Whenever this point of theoretical perfection is 
reached, the selling value of land wiQ entirely disappear, 
and the charge made to the individual by the commu- 
nity for the use of the common property will become in 
form what it is in fact— a rent. But until that point is 
reached, this rent may be collected by the simple increase 
of a tax already levied in all our States, assessed (as 
direct taxes are now assessed) upon the selling value of 
land irrespective of improvements— a value that can be 
ascertained more easily and more accurately than any 
other value. 

For a fuU exposition of the effects of this change in 
the method of raising public revenues, I must refer the 
reader to the works in which I have treated this branch 
of the subject at greater length than is here possible. 
Briefly, they would be threefold : 

In the first place, all taxes that now fall upon the exer- 
tion of labor or use of capital would be abolished. No 



284 PROTECTION OR FREE TRADE! 

one would be taxed for building a house or improving a 
farm or opening a mine, for bringing things in from 
foreign countries, or for adding in any way to the stock 
of things that satisfy human wants and constitute 
national wealth. Every one would be free to make and 
save wealth ; to buy, sell, give or exchange, without let 
or hindrance, any article of human production the use 
of which did not involve any public injury. All those 
taxes which increase prices as things pass from hand to 
hand, falling finally upon the consumer, would disappear. 
Buildings or other fixed improvements would be as 
secure as now, and could be bought and sold, as now, 
subject to the tax or ground-rent due to the community 
for the ground on which they stood. Houses and the 
ground they stand on, or other improvements and the 
land they are made on, would also be rented as now. 
But the amount the tenant would have to pay would be 
less than now, since the taxes now levied on buildings or 
improvements fall ultimately (save in decaying commu- 
nities) on the user, and the tenant would therefore get 
the benefit of their abolition. And in this reduced rent 
the tenant would pay all those taxes that he now has to 
pay in addition to his rent— any remainder of what he 
paid on account of the ground going not to increase the 
wealth of a landlord, but to add to a fund in which the 
tenant himself would be an equal sharer. 

In the second place, a large and constantly increasing 
fund would be provided for common uses, without any 
tax on the earnings of labor or on the returns of capital 
—a fund which in weU-settled countries would not only 
suffice for aU of what are now considered necessary 
expenses of government, but would leave a large surplus 
to be devoted to purposes of general benefit. 

In the third place, and most important of all, the 
monopoly of land would be abolished, and land would be 



TRUE FREE TRADE. 286 

thrown open and kept open to the use of labor, since it 
would be unprofitable for any one to hold land without 
putting it to its full use, and both the temptation and 
the power to speculate in natural opportunities would be 
gone. The speculative value of land would be destroyed 
as soon as it was known that, no matter whether land 
was used or not, the tax would increase as fast as the 
value increased; and no one would want to hold land 
that he did not use. With the disappearance of the capi- 
talized or selling value of land, the premium which must 
now be paid as purchase money by those who wish to 
use land would disappear, differences in the value of 
land being measured by what would have to be paid for 
it to the community, nominally in taxes but really in 
rent. So long as any unused land remained, those who 
wished to use it could obtain it, not only without the 
payment of any purchase price, but without the payment 
of any tax or rent. Nothing would be required for the 
use of land till less advantageous land came into use, 
and possession thus gave an advantage over and above 
the return to the labor and capital expended upon it. 
And no matter how much the growth of population and 
the progress of society increased the value of land, this 
increase would go to the whole community, swelling that 
general fund in which the poorest would be an equal 
sharer with the richest. 

Thus the great cause of the present unequal distribu- 
tion of wealth would be destroyed, and that one-sided 
competition would cease which now deprives men who 
possess nothing but power to labor of the benefits of 
advancing civilization, and forces wages to a minimum 
no matter what the increase of wealth. Labor, free to 
the natural elements of production, would no longer be 
incapable of emplojdng itself, and competition, acting as 
fully and freely between employers as between employed, 



286 PROTECTION OR FREE TRADE! 

would carry wages up to what is truly their natural rate— 
the full value of the produce of labor— and keep them there. 

Let us turn again to the tariff question. 

The mere abolition of protection— the mere substitu- 
tion of a revenue tariff for a protective tariff— is such a 
lame and timorous application of the free-trade principle 
that it is a misnomer to speak of it as free trade. A 
revenue tariff is only a somewhat milder restriction on 
trade than a protective tariff. 

Free trade, in its true meaning, requires not merely 
the abolition of protection but the sweeping away of all 
tariffs— the abolition of all restrictions (save those 
imposed in the interests of public health or morals) on 
the bringing of things into a country or the carrying of 
things out of a country. 

But free trade cannot logically stop with the abolition 
of custom-houses. It applies as weU to domestic as to 
foreign trade, and in its true sense requires the abolition 
of all internal taxes that fall on buying, selling, trans- 
porting or exchanging, on the making of any transaction 
or the carrying on of any business, save of course where 
the motive of the tax is public safety, health or morals. 

Thus the adoption of true free trade involves the 
abolition of all indirect taxation of whatever kind, and 
the resort to direct taxation for aU public revenues. 

But this is not all. Trade, as we have seen, is a mode 
of production, and the freeing of trade is beneficial be- 
cause it is a freeing of production. For the same reason, 
therefore, that we ought not to tax any one for adding to 
the wealth of a country by bringing valuable things into 
it, we ought not to tax any one for adding to the wealth 
of a country by producing within that country valuable 
things. Thus the principle of free trade requires that we 
should not merely abolish all indirect taxes, but that 



TRUE FREE TRADE. 287 

we should abolish as well all direct taxes on things that 
are the produce of labor ; that we should, in short, give 
fuU play to the natural stimulus to production— the 
possession and enjoyment of the things produced— by 
imposiag no tax whatever upon the production, accumu- 
lation or possession of wealth {i.e., things produced by 
labor), leaving every one free to make, exchange, give, 
spend or bequeath. 

There are thus left, as the only taxes by which in 
accordance with the free-trade principle revenue can be 
raised, these two classes : 

1. Taxes on ostentation. 

Since the motive of ostentation in the use of wealth is 
simply to show the ability to expend wealth, and since 
this can be shown as well in the ability to pay a tax, 
taxes on ostentation pure and simple, while not checking 
the production of wealth, do not even restrain the enjoy- 
ment of wealth. But such taxes, while they have a place 
in the theory of taxation, are of no practical importance. 
Some trivial amount is raised in England from taxes on 
footmen wearing powdered wigs, taxes on armorial bear- 
ings, etc., but such taxes are not resorted to in this 
country, and are incapable anywhere of yielding any 
considerable revenue. 

2. Taxes on the value of land. 

Taxes on the value of land must not be confounded 
with taxes on land, from which they differ essentially. 
Taxes on land— that is to say, taxes levied on land by 
quantity or area— apply equally to all land, and hence 
fall ultimately on production, since they constitute a 
check to the use of land, a tax that must be paid as the 
condition of engaging in production. Taxes on land 
values, however, do not fall upon all land, but only upon 
valuable land, and on that in proportion to its value. 
Hence they do not in any degree check the ability of 



288 PROTECTION OR FREE TRADE! 

labor to avail itself of land, and are merely an appro- 
priation, by the taxing power, of a portion of the pre- 
mium which the owner of valuable land can charge labor 
for its use. In other words, a tax on land, according to 
quantity, could ultimately be transferred by owners of 
land to users of land and become a tax upon production. 
But a tax on land values must, as is recognized by all 
economists, fall on the owner of land and cannot be by 
him in any way transferred to the user. The landowner 
can no more compel those to whom he may sell or let his 
land to pay a tax levied on its value, than he could 
compel them to pay a mortgage. 

A tax on land values is of all taxes that which best 
fulfils every requirement of a perfect tax. As land 
cannot be hidden or carried off, a tax on land values can 
be assessed with more certainty and can be collected 
with greater ease and less expense than any other tax, 
while it does not in the slightest degree check production 
or lessen its incentive. It is, in fact, a tax only in form, 
being in nature a rent— a taking for the use of the com- 
munity of a value that arises not from individual exer- 
tion but from the growth of the community. For it is 
not anything that the individual owner or user does that 
gives value to land. The value that he creates is a value 
that attaches to improvements. This, being the result 
of individual exertion, properly belongs to the individual, 
and cannot be taxed without lessening the incentive to 
production. But the value that attaches to land itself is 
a value arising from the growth of the community and 
increasing with social growth. It, therefore, properly 
belongs to the community, and can be taken to the last 
penny without in the slightest degree lessening the incen- 
tive to production. 

Taxes on land values are thus the only taxes from 
which, in accordance with the principle of free trade, 



TRUE FREE TRADE. 269 

any considerable amount of revenue can be raised, and 
it is evident that to carry out the free-trade principle to 
the point of abolishing all taxes that hamper or lessen 
production would of itself involve very nearly the same 
measures which we have seen are required to assert the 
common right to land and place aU citizens upon an 
equal footing. 

To make these measures identically the same, it is only 
necessary that the taxation of land values, to which true 
free trade compels us to resort for public revenues, 
should be carried far enough to take, as near as might 
practically be, the whole of the income arising from the 
value given to land by the growth of the community. 

But we have only to go one step further to see that 
free trade does, indeed, require this, and that the two 
reforms are thus absolutely identical. 

Free trade means free production. Now fully to free 
production it is necessary not only to remove all taxes 
on production, but also to remove all other restrictions 
on production. True free trade, in short, requires that 
the active factor of production. Labor, shall have free 
access to the passive factor of production. Land. To 
secure this all monopoly of land must be broken up, and 
the equal right of all to the use of the natural elements 
must be secured by the treatment of the land as the 
common property in usufruct of the whole people. 

Thus it is that free trade brings us to the same simple 
measure as that which we have seen is necessary to 
emancipate labor from its thraldom and to secure that 
justice in the distribution of wealth which will make 
every improvement or reform beneficial to all classes. 

The partial reform miscalled free trade, which consists 
in the mere abolition of protection— the mere substitu- 
tion of a revenue tariff for a protective tariff— cannot 
help the laboring-classes, because it does not touch the 



290 PEOTECTION OR FREE TR^E? 

fundamental cause of that unjust and unequal distribu- 
tion which, as we see to-day, makes "labor a drug and 
population a nuisance " in the midst of such a plethora 
of wealth that we talk of over-production. True free 
trade, on the contrary, leads not only to the largest pro- 
duction of wealth, but to the fairest distribution. It is 
the easy and obvious way of bringing about that change 
by which alone justice in distribution can be secured, and 
the great inventions and discoveries which the human 
mind is now grasping can be converted into agencies for 
the elevation of society from its very foundations. 

This was seen with the utmost clearness by that knot 
of great Frenchmen who, in the last century, first raised 
the standard of free trade. What they proposed was 
not the mere substitution of a revenue tariff for a protec- 
tive tariff, but the total abolition of all taxes, direct and 
indirect, save a single tax upon the value of land— the 
impot unique. They realized that this unification of taxa- 
tion meant not merely the removal from commerce and 
industry of the burdens placed upon them, but that it 
also meant the complete reconstruction of society— the 
restoration to all men of their natural and equal rights 
to the use of the earth. It was because they realized 
this, that they spoke of it in terms that applied to any 
mere fiscal change, however beneficial, would seem wildly 
extravagant, likening it, in its importance to mankind, 
to those primary inventions which made the first 
advances in civilization possible— the use of money and 
the adoption of written characters. 

And whoever will consider how far-reaching are the 
benefits that would result to mankind from a measure 
which, removing all restrictions from the production of 
wealth, would also secure equitable distribution, will see 
that these great Frenchmen were not extravagant. 

True free trade would emancipate labor. 



CHAPTER XXVII. 

THE LION IN THE WAT. 

WE may now see why the advocacy of free trade has 
been so halting and half-hearted. 

It is because the free-trade principle carried to its 
logical conclusion would destroy that monopoly of 
nature's bounty which enables those who do no work to 
live in luxury at the expense of "the poor people who 
have to work," that so-called free traders have not ven- 
tured to ask even the abolition of tariffs, but have 
endeavored to confine the free-trade principle to the 
mere abolition of protective duties. To go fui-ther 
would be to meet the Hon of "vested interests." 

In Great Britain the ideas of Quesnay and Tui^ot 
found a soil in which, at the time, they could grow only 
in stunted form. The power of the landed aristocracy 
was only beginning to find something of a counterpoise 
in the growth of the power of capital, and in politics, 
as in literature, Labor had no voice. Adam Smith 
belonged to that class of men of letters always disposed 
by strong motives to view things which the dominant 
class deem essential in the same light as they do, and 
who before the diffusion of education and the cheapening 
of books could have had no chance of being heard on 
any other terms. Under the shadow of an absolute 
despotism more liberty of thought and expression may 

291 



292 PROTECTION OR FREE TRADE? 

sometimes be enjoyed than where power is more diffused, 
and forty years ago it would doubtless have been safer 
to express in Russia opinions adverse to serfdom than in 
South Carolina to have questioned slavery. And so, 
while Quesnay, the favorite physician of the master of 
France, could in the palace of Versailles carry his free- 
trade propositions to the legitimate conclusion of the 
impdt unique, Adam Smith, had he been so radical, could 
hardly have got the leisure to write "The Wealth of 
Nations " or the means to print it. 

I am not criticizing Adam Smith, but pointing out 
conditions which have affected the development of an 
idea. The task which Adam Smith undertook— that of 
showing the absurdity and impolicy of protective tariffs 
—was in his time and place a sufficiently difficult one, 
and even if he saw how much further than this the prin- 
ciples he enunciated really led, the prudence of the man 
who wishes to do what may be done in his day and 
generation, confident that where he lays the foundation 
others will in due time rear the edifice, might have 
prompted him to avoid carrying them further. 

However this may be, it is evidently because free 
trade really goes so far, that British free traders, so 
called, have been satisfied with the abolition of protec- 
tion, and, abbreviating the motto of Quesnay, " Clear the 
ways and let things alone," into " Let things alone," have 
shorn off its more important half. For one step further 
—the advocacy of the abolition of revenue tariffs, as well 
as of protective tariffs— would have brought them upon 
dangerous ground. It is not only, as English writers 
intimate to excuse the retaining of a revenue tariff, that 
direct taxation could not be resorted to without arousing 
the British people to ask themselves why they should 
continue to support the descendants of royal favorites, 
and to pay interest on the vast sums spent during former 



THE LION IN THE WAY. 293 

generations in worse than useless wars; but it is that 
direct taxation could not be advocated without danger 
to even more important "vested interests." One step 
beyond the abolition of protective duties, and the British 
free-trade movement must have come fuU against that 
fetish which for some generations the British people 
have been taught to reverence as the very Ark of the 
Covenant— private property in land. 

For in the British kingdoms (save in Ireland and the 
Scottish Highlands) private property in land was not 
instituted in the short and easy way in which "Will 
Atkins endeavored to institute it on Crusoe's island. It 
has been the gradual result of a long series of usurpa- 
tions and spoliations. In the view of British law there 
is to-day but one owner of British soil, the Crown— that 
is to say, the British people. The individual landholders 
are still in constitutional theory what they once were in 
actual fact— mere tenants. The process by which they 
have become virtual owners has been that of throwing 
upon indirect taxation the rents and taxes they were 
once held to pay in return for their lands, while they 
have added to their domains by fencing in the conmions, 
in much the same manner as some of the same class 
have recently fenced in large tracts of our own public 
domain. 

The entire abolition of the British tariff would involve 
as a necessary consequence the abolition of the greater 
part of the internal indirect taxation, and would thus 
compel heavy direct taxation, which would fall not upon 
consumption but upon possession. The moment this 
became necessary, the question of what share should be 
borne by the holders of land must inevitably arise in 
such a way as to open the whole question of the rightful 
ownership of British soil. For not only do all economic 
considerations point to a tax on land values as the 



294 PEOTECTION OR FREE TRADE! 

proper source of public revenues; but so do all British 
traditions. A land tax of four shillings in the pound of 
rental value is still nominally enforced in England, but 
being levied on a valuation made in the reign of William 
III., it amounts in reality to not much over a penny in 
the pound. With the abolition of indirect taxation this 
is the tax to which men would naturally turn. The 
resistance of landholders would bring up the question of 
title, and thus any movement which went so far as to 
propose the substitution of direct for indirect taxation 
must inevitably end in a demand for the restoration to 
the British people of their birthright. 

This is the reason why in Great Britain the free-trade 
principle was aborted into that spurious thing "British 
free trade," which calls a sudden halt to its own prin- 
ciples, and after demonstrating the injustice and impolicy 
of all tariffs, proceeds to treat tariffs for revenue as 
something that must of necessity exist. 

In assigning these reasons for the failure to carry the 
free-trade movement further than the abolition of pro- 
tection, I do not, of course, mean to say that such 
reasons have consciously swayed free traders. I am 
definitely pointing out what by them has been in many 
cases doubtless only vaguely felt. We imbibe the sym- 
pathies, prejudices and antipathies of the circle in which 
we move, rather than acquire them by any process of 
reasoning. And the prominent advocates of free trade, 
the men who have been in a position to lead and educate 
public opinion, have belonged to the class in which the 
feelings I speak of hold sway— for that is the class of 
education and leisure. 

In a society where unjust division of wealth gives the 
fruits of labor to those who do not labor, the classes who 
control the organs of public education and opinion— the 
classes to whom the many are accustomed to look for 



THE LION m THE WAY. 296 

light and leading, must be loath to challenge the primary 
wrong, whatever it may be. This is inevitable, from the 
fact that the class of wealth and leisure, and conse- 
quently of culture and influence, must be, not the class 
which loses by the unjust distribution of wealth, but the 
class which (at least relatively) gains by it. 

Wealth means power and "respectability," while 
poverty means weakness and disrepute. So in such a 
society the class that leads and is looked up to, while 
it may be willing to tolerate vague generalities and 
impracticable proposals, must frown on any attempt to 
trace social evils to their real cause, since that is the 
cause that gives their class superiority. On the other 
hand, the class that suffers by these evils is, on that 
account, the ignorant and uninfluential class, the class 
that, from its own consciousness of inferiority, is prone 
to accept the teachings and imbibe the prejudices of the 
one above it ; while the men of superior ability that arise 
within it and elbow their way to the front are constantly 
received into the ranks of the superior class and inter- 
ested in its service, for this is the class that has rewards 
to give. Thus it is that social injustice so long endures 
and is so difficult to make head against. 

Thus it was that in our Southern States while slavery 
prevailed, the influence, not only of the slaveholders 
themselves, but of churches and colleges, the professions 
and the press, condemned so effectually any questioning 
of slavery, that men who never owned and never 
expected to own a slave were ready to persecute and 
ostracize any one who breathed a word against property 
in flesh and blood— ready, even, when the time came, to 
go themselves and be shot in defense of the "peculiar 
institution." 

Thus it was that even slaves believed abolitionists the 
worst of humankind, and were ready to join in the sport 



296 PROTECTION OR FREE TRADE? 

of tarrmg and feathering one. And so, an institution 
in which only a comparatively small class were inter- 
ested, and which was in reality so unprofitable, even to 
them, that now that slavery has been abolished, it would 
be hard to find an ex-slaveholder who would restore it if 
he could, not only dominated public opinion where it 
existed, but exerted such influence at the North, where 
it did not exist, that "abolitionist" was for a long time 
suggestive of " atheist," " communist " and " incendiary." 
The effect of the introduction of steam and labor-sav- 
ing machinery upon the industries of Great Britain was 
such a development of manufactures as to do away with 
all semblance of benefit to the manufacturing classes 
from import, duties, to raise up a capitalistic power 
capable of challenging the dominance of the "landed 
interest," and by concentrating workmen in towns to 
make of them a more important political factor. The 
abolition of protection in Great Britain was carried, 
against the opposition of the agricultural landholders, by 
a combination of two elements, capital and labor, neither 
of which would, of itself, have been capable of winning 
the victory. But, of the two, that which was represented 
by the Manchester manufacturers possessed much more 
effective and independent strength than that whose spirit 
breathed in the Anti-Corn-Law rhymes. Capital fur- 
nished the leadership, the organizing ability and the 
financial means for agitation, and when it was satisfied, 
the further progress of the free-trade movement had to 
wait for the growth of a power which, as an independent 
factor, is only now beginning to make its entrance into 
British politics. Any advance toward the abolition of 
revenue duties would not only have added the strength 
of the holders of municipal and mining land to that of 
the holders of agricultural land, but would also have 
arrayed in opposition the very class most efficient in the 



THE LION IN THE WAY. 207 

free-trade movement. For, save where their apparent 
interests come into clear and strong opposition, as they 
did in Great Britain upon the question of protective 
duties, capitalists as a class share the feelings that ani- 
mate landholders as a class. Even in England, where the 
division between the three economic orders— landholders, 
capitalists and laborers— is clearer than anywhere else, 
the distinction between landholders and capitalists is 
more theoretical than real. That is to say, the land- 
holder is generally a capitalist as well, and the capitalist 
is generally in actuality or expectation to some extent a 
landholder, or by the agency of leases and mortgages is 
interested in the profits of landholding. Public debts 
and the investments based thereon constitute, moreover, 
a further powerful agency in disseminating through 
the whole ''House of Have" a bitter antipathy to any- 
thing that might bring the origin of property into dis- 
cussion. 

In the United States the same principles have operated, 
though owing to differences in industrial development 
the combinations have been different. Here the interest 
that could not be " protected " has been the agricultural, 
and the active and powerful manufacturing interest has 
been on the side of protective duties. And though the 
"landed interest" here has not been so well intrenched 
politically as in Great Britain, yet not only has land- 
ownership been more widely diffused, but our rapid 
growth has interested a larger proportion of the present 
population in anticipating, by speculation based on 
increasing land values, the power of levying tribute on 
those yet to come. Thus private property in land has 
been in reality even stronger here than in Great Britain, 
while it has been to those interested in it that the oppo- 
nents of protection have principally appealed. Under 
such circumstances there has been here even less disposi- 



298 



PROTECTION OR FREE TRADE? 



tion than in Great Britain to carry the free-trade prin- 
ciple to its legitimate conclusions, and free trade has 
been presented to the American people in the emascu- 
lated shape of a "revenue reform" too timid to ask for 
even " British free trade." 



CHAPTER XXVm. 

FREE TRADE AND SOCIALISM. 

THROUGHOUT the civilized world, and preeminently 
in Great Britain and the United States, a power is 
now arising which is capable of carrying the principles 
of free trade to their logical conclusion. But there are 
difficulties in the way of concentrating this power on 
such a purpose. 

It requires reflection to see that manifold effects result 
from a single cause, and that the remedy for a multitude 
of evils may lie in one simple reform. As in the infancy 
of medicine, men were disposed to think each distinct 
symptom called for a distinct remedy, so when thought 
begins to turn to social subjects there is a disposition to 
seek a special cure for every ill, or else (another form of 
the same short-sightedness) to imagine the only adequate 
remedy to be something which presupposes the absence 
of those ills; as, for instance, that all men should be 
good, as the cure for vice and crime; or that all men 
should be provided for by the state, as the cure for 
poverty. 

There is now sufficient social discontent and a suffi- 
cient desire for social reform to accomplish great things 
if concentrated on one line. But attention is distracted 
and effort divided by schemes of reform which though 
they may be good in themselves are, with reference to 

298 



300 PROTECTION OR FREE TRADE? 

the great end to be attained, either inadequate or super- 
adequate. 

Here is a traveler who, beset by robbers, has been left 
bound, blindfolded and gagged. Shall we stand in a 
knot about him and discuss whether to put a piece of 
court-plaster on his cheek or a new patch on his coat, or 
shall we dispute with each other as to what road he 
ought to take and whether a bicycle, a tricycle, a horse 
and wagon, or a railway, would best help him on! 
Should we not rather postpone such discussion until we 
have cut the man's bonds ? Then he can see for himself, 
speak for himself, and help himself. Though with a 
scratched cheek and a torn coat, he may get on his feet, 
and if he cannot find a conveyance to suit him, he wUl at 
least be free to walk. 

Very much like such a discussion is a good deal of 
that now going on over "the social problem"— a discus- 
sion in which all sorts of inadequate and impossible 
schemes are advocated to the neglect of the simple plan 
of removing restrictions and giving Labor the use of its 
own powers. 

This is the first thing to do. And, if not of itself suffi- 
cient to cure all social iUs and bring about the highest 
social state, it will at least remove the primary cause of 
wide-spread poverty, give to aU the opportunity to use 
their labor and secure the earnings that are its due, stimu- 
late all improvement, and make all other reforms easier. 

It must be remembered that reforms and improve- 
ments in themselves good may be utterly inefficient to work 
any general improvement until some more fundamental 
reform is carried out. It must be remembered that there 
is in every work a certain order which must be observed 
to accomplish anything. To a habitable house a roof is 
as important as walls ; and we express in a word the end 
to which a house is built when we speak of putting a 



1 



FREE TRADE AND SOCIALISM. 801 

roof over our heads. But we cannot build a house from 
roof down ; we must build from foundation up. 

To recur to our simile of the laborer habitually preyed 
upon by a series of robbers. It is surely wiser in hini to 
fight them one by one, than all together. And the 
robber that takes all he has left is the one against whom 
his efforts should first be directed. For no matter how 
he may drive off the other robbers, that will not avail 
him except as it may make it easier to get rid of the 
robber that takes all that is left. But by withstanding 
this robber he will secure immediate relief, and being 
able to get home more of his earnings than before, will 
be able so to nourish and strengthen himself that he can 
better contend with robbers— can, perhaps, buy a gun or 
hire a lawyer, according to the method of fighting in 
fashion in his country. 

It is in just such a way as this that Labor mnst seek 
to rid itself of the robbers that now levy upon its earnings. 
Brute strength will avail little unless guided by intelligence. 

The first attempts of working-men to improve their 
condition are by combining to demand higher wages of 
their direct employers. Something can be done in this 
way for those within such organizations ; but it is after 
all very little. For a trades-union can only artificially 
lessen competition within the trade ; it cannot affect the 
general conditions which force men into bitter competi- 
tion with each other for the opportimity to gain a living. 
And such organizations as the Knights of Labor, which 
are to trades-unions what the trades-union is to its indi- 
vidual members, while they give greater power, must 
encounter the same difficulties in their efforts to raise 
wages directly. All such efforts have the inherent disad- 
vantage of struggling against general tendencies. They 
are like the attempts of a man in a crowd to gain room 
by forcing back those who press upon him -—like attempts 



302 PROTECTION OR FREE TRADE! 

to stop a great engine by the sheer force of human mus- 
cle, without cutting off steam. 

This, those who are at first inclined to put faith in the 
power of trades-unionism are beginning to see, and the 
logic of events must more and more lead them to see. 
But the perception that to accomplish large results gen- 
eral tendencies must be controlled, inclines those who do 
not analyze these tendencies into their causes to transfer 
faith from some form of the voluntary organization of 
labor to some form of governmental organization and 
direction. 

AU varieties of what is vaguely called socialism recog- 
nize with more or less clearness the solidarity of the 
interests of the masses of aU countries. Whatever may 
be objected to socialism in its extremest forms, it has at 
least the merit of lessening national prejudices and aim- 
ing at the disbandment of armies and the suppression of 
war. It is thus opposed to the cardinal tenet of protec- 
tionism that the interests of the people of different 
"nations" are diverse and antagonistic. But, on the 
other hand, those who call themselves socialists, so far 
from being disposed to look with disfavor upon govern- 
mental interference and regulation, are disposed to sym- 
pathize with protection as in this respect in harmony 
with socialism, and to regard free trade, at least as it has 
been popularly presented, as involving a reliance on that 
principle of free competition which to their thinking 
means the crushing of the weak. 

Let us endeavor, as weU as can in brief be done, to 
trace the relations between the conclusions to which we 
have come and what, with various shades of meaning, is 
termed "socialism."* 



* The term "socialism" is used so loosely that it is hard to attach 
to it a definite meaning. I myself am classed as a socialist by those 



FEEE TRADE AND SOCOALISM. 303 

In socialism as distinguished from individualism there 
is an unquestionable truth— and that a truth to which 
(especially by those most identified with free-trade princi- 
ples) too little attention has been paid. Man is primarily 
an individual— a separate entity, differing from his fel- 
lows in desires and powers, and requiring for the exercise 
of those powers and the gratification of those desires 
individual play and freedom. But he is also a social 
being, having desires that harmonize with those of his 
fellows, and powers that can be brought out only in con- 
certed action. There is thus a domain of individual 
action and a domain of social action— some things which 
can best be done when each acts for himself, and some 
things which can best be done when society acts for all 
its members. And the natural tendency of advancing 
civilization is to make social conditions relatively more 
important, and more and more to enlarge the domain of 
social action. This has not been sufficiently regarded, 
and at the present time, evil unquestionably results from 
leaving to individual action functions that by reason of 
the growth of society and the development of the arts 
have passed into the domain of social action ; just as, on 
the other hand, evil unquestionably results from social 
interference with what properly belongs to the individual. 

who denounce socialism, while those who profess themselves social- 
ists declare me not to be one. For my own part I neither claim nor 
repudiate the name, and realizing as I do the correlative truth of 
both principles can no more call myself an individualist or a socialist 
than one who considers the forces by which the planets are held to 
their orbits could call himself a centrifugalist or a centripetalist. 
The German socialism of the school of Marx (of which the leading 
representative in England is Mr. H. M. Hyndman, and the best 
exposition in America has been given by Mr. Laurence Gronlund) 
seems to me a high-purposed but incoherent mixture of truth and 
fallacy, the defects of which may be summed up in its want of radi* 
calism— that is to say, of going to the root. 



S04 PROTECTION OR FREE TRADE? 

Society ought not to leave the telegraph and the railway 
to the management and control of individuals; nor yet 
ought society to step in and collect individual debts or 
attempt to direct individual industry. 

But while there is a truth in socialism which individu- 
alists forget, there is a school of socialists who in like 
manner ignore the truth there is in individualism, and 
whose propositions for the improvement of social condi- 
tions belong to the class I have called " super-adequate." 
Socialism in its narrow sense— the socialism that would 
have the state absorb capital and abolish competition — is 
the scheme of men who, looking upon society in its most 
complex organization, have failed to see that principles 
obvious in a simpler stage still hold true in the more in- 
timate relations that result from the division of labor 
and the use of complex tools and methods, and have thus 
fallen into fallacies elaborated by the economists of a 
totally different school, who have taught that capital is 
the employer and sustainer of labor, and have striven to 
confuse the distinction between property in land and 
property in labor-products. Their scheme is that of men 
who, while revolting from the heartlessness and hopeless- 
ness of the " orthodox political economy," are yet entan- 
gled in its fallacies and blinded by its confusions. Con- 
founding "capital" with "means of production," and 
accepting the dictum that " natural wages " are the least 
on which competition can force the laborer to live, they 
essay to cut a knot they do not see how to unravel, by 
making the state the sole capitalist and employer, and 
abolishing competition. 

The carrying on by government of all production and 
exchange, as a remedy for the difficulty of finding 
emplojTuent on the one side, and for overgrown fortunes 
on the other, belongs to the same category as the pre- 
scription that all men should be good. That if all men 



FREE TRADE AND SOCIALISM. 305 

were assigned proper employment and all wealth fairly 
distributed, then none would need employment and there 
would be no injustice in distribution, is as indisputable a 
proposition as that if all were good none would be bad. 
But it will not help a man perplexed as to his path to tell 
him that the way to get to his journey's end is to get 
there. 

That all men should be good is the greatest desidera- 
tum, but it can be secured only by the abolition of con- 
ditions which tempt some and drive others into evil-doing. 
That each should render according to his abilities and 
receive according to his needs, is indeed the very highest 
social state of which we can conceive, but how shall we 
hope to attain such perfection until we can first find 
some way of securing to every man the opportunity to 
labor and the fair earnings of his labor ? Shall we try to 
be generous before we have learned how to be just ? 

All schemes for securing equality in the conditions of 
men by placing the distribution of wealth in the hands of 
government have the fatal defect of beginning at the 
wrong end. They presuppose pure government; but it 
is not government that makes society; it is society that 
makes government ; and until there is something like sub- 
stantial equality in the distribution of wealth, we cannot 
expect pure government. 

But to put all men on a footing of substantial equality, 
so that there could be no dearth of employment, no " over- 
production," no tendency of wages to the minimum of 
subsistence, no monstrous fortunes on the one side and 
no army of proletarians on the other, it is not necessary 
that the state should assume the ownership of all the 
means of production and become the general employer 
and universal exchanger; it is necessary only that the 
equal rights of all to that primary means of production 
which is the source all other means of production are 



306 PROTECTION OR FREE TRADE! 

derived from, should be asserted. And tMs, so far from 
involving an extension of governmental functions and 
machinery, involves, as we have seen, their great reduc- 
tion. It would thus tend to purify government in two 
ways— first, by the betterment of the social conditions on 
which purity in government depends, and second, by the 
simplification of administration. This step taken, and 
we could safely begin to add to the functions of the state 
in its proper or cooperative sphere. 

There is in reality no conflict between labor and capi- 
tal;* the true conflict is between labor and monopoly. 
That a rich employer " squeezes " needy workmen may be 
true. But does this squeezing power result from his 
riches or from their need? No matter how rich an em- 
ployer might be, how would it be possible for him to 
squeeze workmen who could make a good living for 
themselves without going into his employment? The 
competition of workmen with workmen for employment, 
which is the real cause that enables, and even in most 
cases forces, the employer to squeeze his workmen, arises 
from the fact that men, debarred of the natural opportu- 
nities to employ themselves, are compelled to bid against 
one another for the wages of an employer. Abolish the 
monopoly that forbids men to employ themselves, and 
capital could not possibly oppress labor. In no case could 
the capitalist obtain labor for less than the laborer could 



* The great source of confasion in regard to such matters arises 
from the failure to attach any definite meaning to terms. It must 
always be remembered that nothing that can be classed either as 
labor or as land can be accounted capital in any definite use of the 
term, and that much that we commonly speak of as capital— such as 
solvent debts, government bonds, etc.— is in reality not even wealth 
—which all true capital must be. For a fuller elucidation of this, 
as of similar points, I must refer the reader to my " Progress and 
Poverty." 



FREE TRADE AND SOCIALISM. 307 

get by employing himself. Once remove the cause of 
that injustice which deprives the laborer of the capital his 
toil creates, and the sharp distinction between capitalist 
and laborer would, in fact, cease to exist. 

They who, seeing how men are forced by competition 
to the extreme of human wretchedness, jump to tiie con- 
clusion that competition should be abolished, are like 
those who, seeing a house burn down, would prohibit the 
use of fire. 

The air we breathe exerts upon every square inch of 
our bodies a pressure of fifteen pounds. Were this pres- 
sure exerted only on one side, it would pin us to the 
ground and crush us to a jelly. But being exerted on 
all sides, we move under it with perfect freedom. It not 
only does not inconvenience us, but it serves such 
indispensable purposes that, relieved of its pressure, we 
should die. 

So it is with competition. Where there exists a class 
denied aU right to the element necessary to life and 
labor, competition is one-sided, and as population in- 
creases must press the lowest class into virtual slavery, 
and even starvation. But where the natural rights of 
all are secured, then competition, acting on every hand 
—between employers as between employed; between 
buyers as between sellers— can injure no one. On the 
contrary it becomes the most simple, most extensive, 
most elastic, and most refined system of cooperation, 
that, in the present stage of social development, and in 
the domain where it wiU freely act, we can rely on for 
the coordination of industry and the economizing of 
social forces. 

In short, competition plays just such a part in the 
social organism as those vital impulses which are beneath 
consciousness do in the bodUy organism. With it, as 
with them, it is only necessary that it should be tree. 



308 PROTECTION OR FREE TRADE! 

The line at which the state should come in is that where 
free competition becomes impossible— a line analogous 
to that which in the individual organism separates the 
conscious from the unconscious functions. There is 
such a line, though extreme socialists and extreme individ- 
ualists both ignore it. The extreme individualist is like 
the man who would have his hunger provide him food ; 
the extreme socialist is like the man who would have his 
conscious will direct his stomach how to digest it. 

Individualism and socialism are in truth not antago- 
nistic but correlative. Where the domain of the one 
principle ends that of the other begins. And although 
the motto Laissez faire has been taken as the watchword 
of an individualism that tends to anarchism, and so-called 
free traders have made " the law of supply and demand " 
a stench in the nostrils of men alive to social injustice, 
there is in free trade nothing that conflicts with a 
rational socialism. On the contrary, we have but to 
carry out the free-trade principle to its logical conclu- 
sions to see that it brings us to such socialism. 

The free-trade principle is, as we have seen, the prin- 
ciple of free production— it requires not merely the 
abolition of protective tariffs, but the removal of all 
restrictions upon production. 

Within recent years a class of restrictions on produc- 
tion, imposed by concentrations and combinations which 
have for their purpose the limiting of production and 
the increase of prices, have begun to make themselves 
felt and to assume greater and greater importance. 

This power of combinations to restrict production 
arises in some cases from temporary monopolies granted 
by our patent laws, which (being the premium that 
society holds out to invention) have a compensatory 
principle, however faulty they may be in method. 

Such cases aside, this power of restricting production 



FREE TRADE AND SOCIALISM. 309 

is derived, in part, from tariff restrictions. Thus the 
American steel-makers who have recently limited their 
production, and put up the price of rails 40 per cent, at 
one stroke, are enabled to do this only by the heavy duty 
on imported rails. They are able, by combination, to 
put up the price of steel rails to the point at which they 
could be imported plus the duty, but no further. Hence, 
with the abolition of the duty this power would be gone. 
To prevent the play of competition, a combination of the 
steel-workers of the whole world would then be neces- 
sary, and this is practically impossible. 

In other part, this restrictive power arises from ability 
to monopolize natural advantages. This would be 
destroyed if the taxation of land values made it unprofi- 
table to hold land without using it. In still other part, 
it arises from the control of businesses which in their 
nature do not admit of competition, such as those of 
railway, telegraph, gas and other similar companies. 

I read in the daily papers that half a dozen representa- 
tives of the " anthracite coal interest " met last evening 
(March 24, 1886), in an ofl&ce in New York. Their con- 
ference, interrupted only by a collation, lasted till three 
o'clock in the morning. When they separated they had 
come to "an understanding among gentlemen" to 
restrict the production of anthracite coal and advance its 
price. 

Now how comes it that half a dozen men, sitting 
around some bottles of champagne and a box of cigars in 
a New York ofl&ce, can by an "understanding among 
gentlemen" compel Pennsylvania miners to stand idle, 
and advance the price of coal along the whole eastern 
seaboard? The power thus exercised is derived in 
various parts from three sources. 

1. From the protective duty on coal. Free trade 
would abolish that, 



310 PROTECTION OR FREE TRADEf 

2. From the power to monopolize land, which enables 
them to prevent others from using coal deposits which 
they will not use themselves. True free trade, as we 
have seen, would abolish that. 

• 3. From the control of railways, and the consequent 
power of fixing rates and making discriminations in 
transportation. 

The power of fixing rates of transportation, and in this 
way of discriminating against persons and places, is a 
power essentially of the same nature as that exercised by 
governments in levying import duties. And the prin- 
ciple of free trade as clearly requires the removal of such 
restrictions as it requires the removal of import duties. 
But here we reach a point where positive action on the 
part of government is needed. Except as between ter- 
minal or " competitive " points where two or more roads 
meet (and as to these the tendency is, by combination or 
" pooling," to do away with competition), the carrying of 
goods and passengers by rail, like the business of tele- 
graph, telephone, gas, water or similar companies, is in 
its nature a monopoly. To prevent restrictions and dis- 
criminations, governmental control is therefore required. 
Such control is not only not inconsistent with the free- 
trade principle; it follows from it, just as the interfer- 
ence of government to prevent and punish assaults upon 
persons and property follows from the principle of indi- 
vidual liberty. Thus, if we carry free trade to its logical 
conclusions we are inevitably led to what monopolists, who 
wish to be " let alone " to plunder the public, denounce as 
" socialism," and which is, indeed, socialism, in the sense 
that it recognizes the true domain of social functions. 

Whether businesses in their nature monopolies should 
be regulated by law or should be carried on by the com- 
munity, is a question of method. It seems to me, how- 
ever, that experience goes to show that better results can 
be secured, with less risk of governmental corruption, by 



\ 



FEEE TRADE AND SOCIALISM. 311 

state management than by state regulation. But the 
great simplification of government which would result 
from the abolition of the present complex and demora- 
lizing modes of taxation would vastly increase the ease 
and safety with which either of these methods could be 
applied. The assumption by the state of aU those social 
functions in which competition will not operate would 
involve nothing like the strain upon governmental 
powers, and would be nothing like as provocative of 
corruption and dishonesty, as our present method of col- 
lecting taxes. The more equal distribution of wealth 
that would ensue from the reform which thus simplified 
government, would, moreover, increase public intelli- 
gence and purify public morals, and enable us to bring a 
higher standard of honesty and ability to the manage- 
ment of public affairs. We have no right to assume that 
men would be as grasping and dishonest in a social state 
where the poorest could get an abundant living as they 
are in the present social state, where the fear of poverty 
begets insane greed. 

There is another way, moreover, in which true free 
trade tends strongly to socialism, in the highest and best 
sense of the term. The taking for the use of the com- 
munity of that value of pri\Tlege which attaches to the 
possession of land, would, wherever social development 
has advanced beyond a certain stage, yield revenues even 
larger than those now raised by taxation, while there 
would be an enormous reduction in public expenses con- 
sequent, directly and indirectly, upon the abolition of 
present modes of taxation. Thus would be provided a 
fund, increasing steadily with social growth, that could 
be applied to social purposes now neglected. And 
among the purposes which will suggest themselves to the 
reader by which the surplus income of the community 
could be used to increase the sum of human knowledge, 
the diffusion of elevating tastes, and the gratification of 



312 PROTECTION OR FREE TRADE? 

healthy desires, there is none more worthy than that of 
making honorable provision for those deprived of their 
natural protectors, or through no fault of their own 
incapacitated for the struggle of life. 

We should think it sin and shame if a great steamer, 
dashing across the ocean, were not brought to a stop by 
a signal of distress from the meanest smack ; at the sight 
of an infant lashed to a spar, the mighty ship would 
round to, and men would spring to launch a boat in 
angry seas. Thus strongly does the bond of our com- 
mon humanity appeal to us when we get beyond the hum 
of civilized life. And yet— a miner is entombed alive, a 
painter falls from a scaffold, a brakeman is crushed in 
coupling cars, a merchant fails, falls ill and dies, and 
organized society leaves widow and children to bitter 
want or degrading alms. This ought not to be. Citizen- 
ship in a civUized community ought of itself to be insur- 
ance against such a fate. And having in mind that the 
income which the community ought to obtain from the 
land to which the growth of the community gives value 
is in reality not a tax but the proceeds of a just rent, an 
English Democrat (William Saunders, M.P.) puts in this 
phrase the aim of true free trade : " No taxes at all, and 
a pension to everybody." 

This is denounced as " the rankest socialism " by those 
whose notion of the fitness of things is, that the descen- 
dants of royal favorites and blue-blooded thieves should be 
kept in luxurious idleness all their lives long, by pensions 
wrung from struggling industry, while the laborer and his 
wife, worn out by hard work, for which they have received 
scarce living wages, are degraded by a parish dole, or 
separated from each other in a "work-house." 

If this is socialism, then, indeed, is it true that free 
trade leads to socialism. 



CHAPTER XXIX 

PRACTICAL POLITICS. 

ON a railway train I once fell in with a Pittsburgh 
brass band that was returning from a celebration. 
The leader and I shared the same seat, and between the 
tunes with which they beguiled the night, we got into a 
talk which, from politics, touched the tariff. I neither 
expressed my own opinions nor disputed his, but asked 
him some questions as to Jiow protection benefited labor. 
His answers seemed hardly to satisfy himself, and sud- 
denly he said : 

" Look here, stranger, may I ask you a question 1 I 
mean no offense, but I'd like to ask you a straightfor- 
ward question. Are you a free trader ? " 

"lam." 

"A real free trader— one that wants to abolish the 
tariff?" 

" Yes, a real free trader. I would have trade between 
the United States and the rest of the world as free as it 
is between Pennsylvania and Ohio." 

" Give me your hand, stranger," said the band-leader, 
jumping up. " I like a man who's out and out." 

"Boys," he exclaimed, turning to some of his bands- 
men, "here's a sort of man you never saw; here's a real 
free trader, and he ain't ashamed to own it." And when 
the "boys" had shaken hands with me, very much as 

313 



314 PROTECTION OK FREE TRADE? 

they might have shaken hands with the " Living Skele- 
ton" or the "Chinese Giant," "Do you know, stranger," 
the band-master continued, "I've been hearing of free 
traders all my life, but you're the first I ever met. I've 
seen men that other people called free traders, but when 
it came their turn they always denied it. The most they 
would admit was that they wanted to trim the tariff 
down a little, or fix it up better. But they always 
insisted we must have a tariff, and I'd got to believe that 
there were no real free traders; that they were only a 
sort of bugaboo." 

My Pittsburgh friend was in this respect, I think, no 
unfair sample of the great body of the American people 
of this generation. The only free traders most of them 
have seen and heard have been anxious to deny the 
appellation— or at least to insist that we always must 
have a tariff, and to deprecate sudden reductions. 

Is it any wonder that the fallacies of protection run 
rampant when such is the only opposition they meet? 
Dwarfed into mere revenue reform the harmony and 
beauty of free trade are hidden ; its moral force is lost ; 
its power to remedy social evils cannot be shown, and 
the injustice and meanness of protection cannot be 
arraigned. The "international law of God" becomes a 
mere fiscal question which, appeals only to the intellect 
and not to the heart, to the pocket and not to the con- 
science, and on which it is impossible to arouse the 
enthusiasm that is alone capable of contending with 
powerful interests. When it is conceded that custom- 
houses must be maintained and import duties levied, the 
average man will conclude that these duties might as 
weU be protective, or at least wiU trouble himself little 
about them. When told that they must beware of 
moving too quickly, people are not likely to move at all. 

Such advocacy is not of the sort that can compel dis- 



PRACTICAL POLITICS. 815 

cussion, awaken thought, and press forward a great 
cause against powerful opposition. Half a truth is not 
half so strong as a whole truth, and to minimize such a 
principle as that of free trade in the hope of disarming 
opposition, is to lessen its power of securing support in 
far greater degree than to lessen the antagonism it must 
encounter. A principle that in its purity will be grasped 
by the popular mind loses its power when befogged by 
concessions and enervated by compromises. 

But the mistake which such advocates of free trade 
make has a deeper root than any misapprehension as to 
policy. They are, for the most part, men who derive 
their ideas from the emasculated and incoherent political 
economy taught in our colleges, or from political tradi- 
tions of "States' rights" and "strict construction " now 
broken and weak. They do not present free trade in its 
beauty and strength because they do not so see it. They 
have not the courage of conviction, because they have 
not the conviction. They have opinions, but these 
opinions lack that burning, that compelling force that 
springs from a vital conviction. They see the absurdity 
and waste of protection, and the illogical character of 
the pleas made for it, and these things oflEend their sense 
of fitness and truth ; but they do not see that free trade 
really means the emancipation of labor, the abolition of 
poverty, the restoring to the disinherited of their birth- 
right. Such free traders are well represented by jour- 
nals which mildly oppose protection when no election is 
on, but which at election-times are as quiet as mice. 
They are in favor of what they call free trade, as a cer- 
tain class of good people are in favor of the conversion 
of the Jews. When entirely convenient they will speak, 
write, attend a meeting, eat a dinner or give a little money 
for the cause, but they will hardly break with their party 
or "throw away" a vote. 



316 PROTECTION OR FREE TRADE? 

Even the most energetic and public-spirited of these 
men are at a fatal disadvantage when it comes to a 
popular propaganda. They can well enough point out 
the abuses of protection and expose its more transparent 
sophistries, but they cannot explain the social phenomena 
in which protection finds its real strength. All they can 
promise the laborer is that production shall be increased 
and many commodities cheapened. But how can this 
appeal to men who are accustomed to look upon " over- 
production " as the cause of wide-spread distress, and who 
are constantly told that the cheapness of commodities is 
the reason why thousands have to suffer for the want of 
them? And when confronted by the failure of revenue 
reform to eradicate pauperism and abolish starvation— 
when asked why in spite of the adoption in Great Britain 
of the measures he proposes, wages there are so low and 
poverty so dire, the free trader of this type can make no 
answer that wiQ satisfy the questioner, even if he can 
give one satisfactory to himself. The only answer his 
philosophy can give— the only answer he can obtain 
from the political economy taught by the "free-trade" 
text-books— is that the bitter struggle for existence 
which crushes men into pauperism and starvation is of 
the nature of things. And whether he attributes this 
nature of things to the conscious volition of an intelli- 
gent Creator or to the working of blind forces, the man 
who either definitely or vaguely accepts this answer is 
incapable of feeling himself or of calling forth in others 
the spirit of Cobden's appeal to Bright. 

Thus it is that free trade, narrowed to a mere fiscal 
reform, can appeal only to the lower and weaker motives 
—to motives that are inadequate to move men in masses. 
Take the current free-trade literature. Its aim is to 
show the impolicy of protection, rather than its injus- 
tice; its appeal is to the pocket, not to the sympathies. 



PRACTICAL POLITICS. 317 

Yet to begin and maintain great popular movements it is 
the moral sense rather than the intellect that must be 
appealed to, sympathy rather than self-interest. For 
however it may be with any individual, the sense of 
justice is with the masses of men keener and truer than 
intellectual perception, and unless a question can assume 
the form of right and wrong it cannot provoke general 
discussion and excite the many to action. And while 
material gain or loss impresses us less vividly the 
greater the number of those we share it with, the power 
of sympathy increases as it spreads from man to man- 
becomes cumulative and contagious. 

But he who follows the principle of free trade to its 
logical conclusion can strike at the very root of protec- 
tion ; can answer every question and meet every objec- 
tion, and appeal to the surest of instincts and the strong- 
est of motives. He wiU see in free trade not a mere 
fiscal reform, but a movement which has for its aim and 
end nothing less than the abolition of poverty, and of 
the vice and crime and degradation that flow from it, by 
the restoration to the disinherited of their natural rights 
and the establishment of society upon the basis of 
justice. He will catch the inspiration of a cause great 
enough to live for and to die for, and be moved by an 
enthusiasm that he can evoke in others. 

It is true that to advocate free trade in its fullness 
would excite the opposition of interests far stronger than 
those concerned in maintaining protective tariffs. But 
on the other hand it would bring to the standard of free 
trade, forces without which it cannot succeed. And 
what those who would arouse thought have to fear is 
not so much opposition as indifference. Without opposi- 
tion that attention cannot be excited, that energy evoked, 
that are necessary to overcome the inertia that is the 
strongest bulwark of existing abuses. A party can no 



318 PEOTECTION OR FREE TRADE! 

more be rallied on a question that no one disputes than 
steam can be raised to working pressure in an open vessel. 

The working-class of the United States, who have con- 
stituted the voting strength of protection, are now ready 
for a movement that will appeal to them on behalf of 
real free trade. For some years past educative agencies 
have been at work among them that have sapped their 
faith in protection. If they have not learned that pro- 
tection cannot help them, they have at least become 
widely conscious that protection does not help them. 
They have been awakening to the fact that there is some 
deep wrong in the constitution of society, although they 
may not see clearly what that wrong is ; they have been 
gradually coming to feel that to emancipate labor radical 
measures are needed, although they may not know what 
those measures are. 

And scattered through the great body thus beginning 
to stir and grope are a rapidly increasing number of men 
who do know what this primary wrong is— men who see 
that in the recognition of the equal right of all to the 
element necessary to life and labor is the hope, and the 
only hope, of curing social injustice. 

It is to men of this kind that I would particularly 
speak. They are the leaven which has in it power to 
leaven the whole lump. 

To abolish private property in land is an undertaking 
so great that it may at first seem impracticable. 

But this seeming impracticability consists merely in 
the fact that the pubUc mind is not yet sufficiently awak- 
ened to the justice and necessity of this great change. 
To bring it about is simply a work of arousing thought. 
How men vote is something we need not much concern 
ourselves with. The important thing is how they think. 

Now the chief agency in promoting thought is discus- 
sion. And to secure the most general and most effective 



PRACTICAL POLITICS. 819 

discussion of a principle it must be embodied in concrete 
form and presented in practical politics, so that men, 
being called to vote on it, shaU be forced to think and 
talk about it. 

The advocates of a great principle should know no 
thought of compromise. They should proclaim it in its 
fullness, and point to its complete attainment as their 
goal. But the zeal of the propagandist needs to be sup- 
plemented by the skill of the politician. While the one 
need not fear to arouse opposition, the other should seek 
to minimize resistance. The political art, like the mili- 
tary art, consists in massing the greatest force against 
the point of least resistance; and, to bring a principle 
most quickly and effectively into practical politics, the 
measure which presents it should be so moderate as 
(while involving the principle) to secure the largest sup- 
port and excite the least resistance. For whether the 
first step be long or short is of little consequence. When 
a start is once made in a right direction, progress is a 
mere matter of keeping on. 

It is in this way that great questions always enter the 
phase of political action. Important political battles 
begin with affairs of outposts, in themselves of little 
moment, and are generally decided upon issue joined not 
on the main question, but on some minor or collateral 
question. Thus the slavery question in the United 
States came into practical politics upon the issue of the 
extension of slavery to new territory, and was decisively 
settled upon the issue of secession. Regarded as an end, 
the abolitionist might well have looked with contempt on 
the proposals of the Republicans, but these proposals 
were the means of bringing to realization what the aboli- 
tionists would in vain have sought to accomplish directly. 

So with the tariff question. Whether we have a pro- 
tective tariff or a revenue tariff is in itself of small 



320 PROTECTION OR FREE TRADE? 

importance, for, though the abolition of protection 
would increase production, the tendency to unequal dis- 
tribution would be unaffected and would soon neutrahze 
the gain. Yet, what is thus unimportant as an end, is 
all-important as a means. Protection is a little robber, 
it is true ; but it is the sentinel and outpost of the great 
robber— the little robber who cannot be routed without 
carrying the struggle into the very stronghold of the 
great robber. The great robber is so well intrenched, 
and people have so long been used to his exactions, that 
it is hard to arouse them to assail him directly. But to 
help those engaged in a conflict with this little robber 
will be to open the easiest way to attack his master, and 
to arouse a spirit that must push on. 

To secure to aU the free use of the power to labor and 
the full enjoyment of its products, equal rights to land 
must be secured. 

To secure equal rights to land there is in this stage of 
civilization but one way. Such measures as peasant 
proprietary, or "land limitation," or the reservation to 
actual settlers of what is left of the public domain, do 
not tend toward it; they lead away from it. They can 
affect only a comparatively unimportant class, and that 
temporarily, whUe their outcome is not to weaken land- 
ownership but rather to strengthen it, by interesting a 
larger number in its maintenance. The only way to 
abolish private property in land is by the way of taxa- 
tion. That way is clear and straightforward. It con- 
sists simply in abolishing, one after another, all imposts 
that are in their nature really taxes, and resorting for 
public revenues to economic rent, or ground value. To 
the full freeing of land, and the complete emancipation 
of labor, it is, of course, necessary that the whole of this 
value should be taken for the common benefit ; but that 
will inevitably follow the decision to collect from this 



PRACTICAL POLITICS. 321 

source the revenues now needed, or even any consider- 
able part of them, just as the entrance of a victorious 
army into a city follows the rout of the army that 
defended it. 

In the United States the most direct way of moving 
on property in land is through local taxation, since that 
is already to some extent levied upon land values. And 
that is doubtless the way in which the final and decisive 
advance wiU be made. But national politics dominate 
State politics, and a question can be brought into discus- 
sion much more quickly and thoroughly as a national 
than as a local question. 

Now to bring an issue into politics it is not necessary 
to form a party. Parties are not to be manufactured; 
they grow out of existing parties by the bringing for- 
ward of issues upon which men wiU divide. "We have, 
ready to our hand, in the tariff question, a means of 
bringing the whole subject of taxation, and, through it, 
the whole social question, into the fullest discussion. 

As we have seen in the inquiry through which we have 
passed, the tariff question necessarily opens the whole 
social question. Any discussion of it to-day must go 
further and deeper than the Anti-Com-Law agitation in 
Great Britain, or than the tariff controversies of Whigs 
and Democrats, for the progress of thought and the 
march of invention have made the distribution of wealth 
the burning question of our times. The making of the 
tariff question a national political issue must now mean 
the discussion in every newspaper, on every stump, and 
at every cross-roads where two men meet, of questions of 
work and wages, of capital and labor, of the incidence of 
taxation, of the nature and rights of property, and of the 
question to which aU these questions lead— the question 
of the relation of men to the planet on which they live. 
In this way more can be accomplished for popular eco- 



322 PROTECTION OR FREE TRADE? 

nomic education in a year than could otherwise be 
accomplished in decades. 

Therefore it is that I would urge earnest men who aim 
at the emancipation of labor and the establishment of 
social justice, to throw themselves into the free-trade 
movement with might and main, and to force the tariff 
question to the front. It is not merely that the free- 
trade side of the tariff controversy best consorts with the 
interests of labor ; it is not merely that until working-men 
get over thinking of labor as a poor thing that needs to be 
"protected," and of work as a dole from gracious capi- 
talists or paternal governments, they cannot rise to a 
sense of their rights; but it is that the movement for 
free trade is in reality the van of the struggle for the 
emancipation of labor. This is the way the bull must go to 
unttcist his rope. It makes no difference how timorously 
the issue against protection is now presented ; it is still 
the thin end of the wedge. It makes no difference how 
little we can hope at once to do; social progress is by 
steps, and the step to which we should address ourselves 
is always the next step.* 

* There is no reason why at least the hulk of the revenues needed 
for the national government under our system should not be collected 
from a percentage on land values, leaving the rest for the local 
governments, just as State, county and municipal taxes are collected 
on one assessment and by one set of oflficials. On the contrary there 
is, over and above the economy that would thus be secured, a strong 
reason for the collection of national revenues from land values in 
the fact that the ground values of great cities and mineral deposits 
are due to the general growth of population. 

But the total abolition of the tariff need not await any such adjust- 
ment. The issuance of paper money, a function belonging properly 
to the General Government, would, properly used, yield a consider- 
able income ; while independent sources of any needed amoimt of 
revenue could be found in various taxes, which though not eco- 
nomically perfect, as is the tax on land values, are yet much less 
objectionable than taxes on imports. The excise tax on spirituous 



1 



PRACTICAL POLITICS. 323 

Nor does it matter that those now active in the free- 
trade movement have no sympathy with our aims; nor 
that they denounce and misrepresent ns. It is our 
policy to support them, and strengthen them, and urge 
them on. No matter how soon they may propose to 
stop, the direction they wish to take is the direction in 
which we must go if we would reach our goal. In 
joining our forces to theirs, we shall not be putting our- 
selves to their use, we shall be making use of them. 

But these men themselves, when fairly started and 
borne on by the impulse of controversy, will go further 
than they now dream. It is the law of all such move- 
ments that they must become more and more radical. 
And while we are especially fortunafte in the United 
States in a class of protectionist leaders who will not 
yield an inch until forced to, our political conditions differ 

liquors ought to be abolished, as it fosters corruption, injuriously 
affects many branches of manufacture and puts a premium on adul- 
teration ; but either by a government monopoly, or by license taxes 
on retail sales, a large revenue might be derived from the liquor traffic 
with much greater advantage to public health and morals than by 
the present system. There are also some stamp taxes which are 
comparatively uninjurious and can be collected easily and cheaply. 

But of all methods of raising an independent Federal revenue, 
that which would yield the largest return with the greatest ease and 
least injury is a tax upon legacies and successions. In a large popu- 
lation the proportion of deaths is as regular as that of births, and 
with proper exemptions in favor of widows, minor children and 
dependent relatives, such a tax would bear harshly on no one, and 
from the publicity which must attach to the transfer of property by 
death or in view of death it is easily collected and little liable to 
evasion. The appropriation of land values would of itself strike at 
the heart of overgrown fortunes, but until that is accomplished, a 
tax of this kind would have the incidental advantage of interfering 
with their transmission. 

Of aU excuses for the continuance of any tariff at all, the most 
groundless is that it is necessary to secure Federal revenues. Even 
the income tax, bad as it is, is in all respects better than a tariff. 



324 PROTECTION OR FREE TRADE! 

from those of Great Britain in 1846, when, the laboring- 
class being debarred from political power, a timely sur- 
render on the part of the defenders of protection checked 
for a while the natural course of the movement, and thus 
prevented the demand for the abolition of protection from 
becoming at once a demand for the abolition of landlord- 
ism. The class that in Great Britain is only coming into 
political power has, with us, political power already. 

Yet even in Great Britain the inevitable tendencies of 
the free-trade movement may clearly be seen. Not only 
has the abolition of protection cleared the ground for the 
far greater questions now beginning to enter British 
politics ; not only has the impulse of tiie free-trade agita- 
tion led to reforms which are placing political power in 
the hands of the many ; but the work done by men who, 
having begun by opposing protection, were not content 
to stop with its abolition, has been one of the most 
telling factors in hastening the revolution now in its 
incipient stages— a revolution that cannot stop short of 
the restoration to the British people of their natural 
rights to their native land. 

Richard Cobden saw that the agitation of the tariff 
question must ultimately pass into the agitation of the 
land question, and from what I have heard of him I am 
inclined to think that were he in life and vigor to-day, he 
would be leading in the movement for the restoration to 
the British people of their natural rights in their native 
land. But, however this may be, the British free-trade 
movement left a "remnant" who, like Thomas Briggs,* 

• Author of "Property and Taxation," etc., and a warm supporter 
of the movement for the restoration of their land to the British 
people. Mr. Briggs was one of the Manchester manufacturers active 
in the Anti-Com-Law movement, and, regarding that victory as a 
mere beginning, has always insisted that Great Britain was yet under 
the blight of protectionism, and that the struggle for true free trade 
was yet to come. 



PRACTICAL POLITICS. 325 

have constantly advocated the canying of free trade to 
its final conclusions. And one of the most effective of 
the revolutionary agencies now at work in Great Britain 
is the Liverpool Financial Reform Association, whose 
Financial Reform Almanac and other publications are 
doing so much to make the British people acquainted 
with the process of usurpation and spoliation by which 
the land of Great Britain has been made the private 
property of a class, and British labor saddled with the 
support of a horde of aristocratic paupers. Yet the 
Liverpool Financial Reform Association is composed of 
men who, for the most part, would shrink from any 
deliberate attack upon property in land. They are 
simply free traders of the Manchester school, logical 
enough to see that free trade means the abolition of 
revenue tariffs as well as of protective tariffs. But in 
striking at indirect taxation they are of necessity dealing 
tremendous blows at private property in land, and sap- 
ping the very foundations of aristocracy, since, in show- 
ing the history of indirect taxation, they are showing 
how the tenants of the nation's land made themselves 
virtual owners ; and in proposing the restoration of the 
direct tax upon land values they are making an issue 
which will involve the complete restoration of British 
land to the British people. 

Thus it is that when men take up the principle of 
freedom they are led on and on, and that the hearty 
advocacy of freedom to trade becomes at length the 
advocacy of freedom to labor. And so must it be in the 
United States. Once the tariff question becomes a 
national issue, and in the struggle against protection, 
free traders will be forced to attack indirect taxation. 
Protection is so well intrenched that before a revenue 
tariff can be secured the active spirits of the free-trade 
party will have far passed the point when that would 
satisfy them ; while before the abolition of indirect taxa- 



826 PROTECTION OR FREE TRADE! 

tion is reached, the incidence of taxation and the nature 
and eflfect of private property in land will have been so 
well discussed that the rest will be but a matter of time. 
Property in land is as indefensible as property in man. 
It is so absurdly impolitic, so outrageously unjust, so 
flagrantly subversive of the true right of property, that 
it can only be instituted by force and maintained by con- 
founding in the popular mind the distinction between 
property in land and property in things that are the 
result of labor. Once that distinction is made clear— 
and a thorough discussion of the tariff question must 
now make it clear— and private property in land is 
doomed. 



CHAPTER XXX. 

CONCLUSION. 

A WEALTHY citizen whom I once supported, and 
called on others to support, for the Presidential 
chair, under the impression that he was a Democrat of 
the school of Jefferson, has recently published a letter 
advising us to steel-plate our coasts, lest foreign navies 
come over and bombard us. This counsel of timidity has 
for its hardly disguised object the inducing of such an 
enormous expenditure of public money as will prevent 
any demand for the reduction of taxation, and thus 
secure to the tariff rings a longer lease of plunder. It 
weU illustrates the essential meanness of the protection- 
ist spirit— a spirit that no more comprehends the true 
dignity of the American Republic and the grandeur of 
her possibilities than it cares for the material interests of 
the great masses of her citizens— "the poor people who 
have to work." 

That which is good harmonizes with all things good ; 
and that which is evil tends to other evil things. 
Properly does Buckle, in his "History of Civilization," 
apply the term " protective " not merely to the system of 
robbery by tariffs, but to the spirit that teaches that the 
many are bom to serve and the few to role ; that props 
thrones with bayonets, substitutes small vanities and 
petty jealousies for high-minded patriotism, and converts 

327 



328 PROTECTION OR FREE TRADE? 

the flower of European youth into uniformed slaves, 
trained to kill eacli other at the word of command. It 
is not accidental that Mr. Tilden, anxious to get rid of 
the surplus revenue in order to prevent a demand for 
the repeal of protective duties, should propose wasting it 
on steel-clad forts, rather than applying it to any pur- 
pose of general utility. Fortifications and navies and 
standing armies not merely suit the protectionist purpose 
in requiring a constant expenditure, and developing a 
class who look on warlike expenditures as conducive to 
their own profit and importance, but they are of a piece 
with a theory that teaches us that our interests are 
antagonistic to those of other nations. 

Unembarrassed by hostile' neighbors; unentangled in 
European quarrels; already, in her sixty millions of 
people, the most powerful nation on earth, and rapidly 
rising to a position that will dwarf the greatest empires, 
the American Republic can afford to laugh to scorn any 
suggestion that she should ape the armaments of Old- 
World monarchies, as she should laugh to scorn the 
parallel suggestion that her industries could be ruined by 
throwing open her ports to the commerce of the world. 

The giant of the nations does not depend for her 
safety upon steel-clad fortresses and armor-plated ships 
which the march of invention must within a few years 
make, even in war-time, mere useless rubbish ; but in her 
population, in her wealth, in the intelligence and inven- 
tiveness and spirit of her people, she has all that would 
be really useful in time of need. No nation on earth 
would venture wantonly to attack her, and none could do 
so with impunity. If we ever again have a foreign war 
it wUl be of our own making. And too strong to fear 
aggression, we ought to be too just to commit it. 

In throwing open our ports to the commerce of the 
world we shall far better secure their safety than by 



CONCLUSION. 329 

fortifying them with all the "protected" plates that our 
steel ring could make. For not merely would free trade 
give us again that mastery of the ocean which protection 
has deprived us of, and stimulate the productive power 
in which real fighting strength lies j but while steel-clad 
forts could afford no defense against the dynamite-drop- 
ping balloons and death-dealing air-ships which will be 
the next product of destructive invention, free trade 
would prevent their ever being sent against us. The 
spirit of protectionism, which is the real thing that it is 
sought to defend by steel-plating, is that of national 
enmity and strife. The spirit of free trade is that of 
fraternity and peace. 

A nobler career is open to the American Republic 
than the servile imitation of European foUies and vices. 
Instead of following in what is mean and low, she may 
lead toward what is grand and high. This league of 
sovereign States, settling their differences by a common 
tribunal and opposing no impediments to trade and 
travel, has in it possibilities of giving to the world a 
more than Roman peace. 

What are the real, substantial advantages of this 
Union of ours? Are they not summed up in the abso- 
lute freedom of trade which it secures, and the commu- 
nity of interests that grows out of this freedom f 11 our 
States were fighting each other with hostile tariffs, and a 
citizen could not cross a State boundary-line without 
having his baggage searched, or a book printed in New 
York could not be sent across the river to Jersey City 
without being held in the post-ofl&ce until duty was paid, 
how long would our Union last, or what would it bo 
worth? The true benefits of our Union, the true basis 
of the interstate peace it secures, is that it has pre- 
vented the establishment of State tariffs and given us 
free trade over the better part of a continent. 



330 PROTECTION OR FREE TRADE! 

We may "extend the area of freedom" whenever we 
choose to— whenever we apply to our intercourse with 
other nations the same principle that we apply to inter- 
course between our States. We may annex Canada to aU 
intents and purposes whenever we throw down the tariff 
wall we have built around ourselves. We need not ask 
for any reciprocity ; if we abolish our custom-houses and 
caU off oui* baggage searchers and Bible confiscators, 
Canada would not and could not maintain hers. This 
would make the two coimtries practically one. Whether 
the Canadians chose to maintain a separate Parliament 
and pay a British lordling for keeping up a mock court 
at Rideau Hall, need not in the slightest concern us. 
The intimate relations that would come of unrestricted 
commerce would soon obliterate the boundary-line ; and 
mutual interest and mutual convenience would speedily 
induce the extension over both countries of the same 
general laws and institutions. 

And so would it be with our kindred over the sea. 
With the abolition of our custom-houses and the opening 
of our ports to the free entry of all good things, the 
trade between the British Islands and the United States 
would become so immense, the intercourse so intimate, 
that we should become one people, and would inevitably 
so conform currency and postal system and general laws 
that Englishman and American would feel themselves as 
much citizens of a common country as do New Yorker 
and Californian. Three thousand miles of water are no 
more of an impediment to this than are three thousand 
miles of land. And with relations so close, ties of blood 
and language would assert their power, and mutual 
interest, general convenience and fraternal feeling might 
soon lead to a pact, which, in the words of our own, 
would unite all the English-speaking peoples in a league 
"to establish justice, insure domestic tranquillity, provide 



CONCLUSION. 331 

for the common defense, promote the general welfare, 
and secure the blessings of liberty." 

Thus would free trade unite what a century ago pro- 
tectionism severed, and in a federation of the nations of 
English speech— the world-tongue of the future— take 
the first step to a federation of mankind. 

And upon our relations with aU other nations our 
repudiation of protection would have a similar tendency. 
The sending of delegations to ask the trade of our sister 
republics of Spanish America avails nothing so long as 
we maintain a tariff which repels their trade. We have 
but to open our ports to draw their trade to us and avail 
ourselves of all their natural advantages. And more 
potent than anything else would be the moral influence 
of our action. The spectacle of a continental republic 
such as ours really putting her faith in the principle of 
freedom, would revolutionize the civilized world. 

For, as I have shown, that violation of natural rights 
which imposes tariff duties is inseparably linked with 
that violation of natural rights which compels the masses 
to pay tribute for the privilege of living. The one can- 
not be abolished without the other. And a republic 
wherein the free-trade principle was thus carried to its 
conclusion, wherein the equal and unalienable rights of 
men were thus acknowledged, would indeed be as a city 
set on a hill. 

The dangers to the Republic come not from without 
but from within. What menaces her safety is no 
armada launched from European shores, but the gather- 
ing cloud of tramps in her own highways. That Krupp 
is casting monstrous cannon, and that in Cherbourg and 
Woolwich projectiles of unheard-of destructiveness are 
being stored, need not alarm her, but there is black omen 
in the fact that Pennsylvania miners are working for 65 
cents a day. No triumphant invader can tread our soil 



332 PROTECTION OR FREE TRADE! 

till the blight of " great estates " has brought " failure of 
the crop of men ; " if there be danger that our cities 
blaze, it is from torches lit in faction fight, not from 
foreign shells. 

Against such dangers forts will not guard us, iron- 
clads protect us, or standing armies prove of any avaiL 
They are not to be avoided by any aping of European 
protectionism ; they come from our failure to be true to 
that spirit of liberty which was invoked at the formation 
of the Republic. They are only to be avoided by con- 
forming our institutions to the principle of freedom. 

For it is true, as was declared by the first National 
Assembly of France, that " ignorance, neglect, or contempt 
of human rights are the sole causes of public misfortunes 
and corruptions of government." 

Here is the conclusion of the whole matter : That we 
should do unto others as we would have them do to us— 
that we should respect the rights of others as scrupu- 
lously as we would have our own rights respected, is not 
a mere counsel of perfection to individuals, but it is the 
law to which we must conform social institutions and 
national policy if we would secure the blessings of abun- 
dance and peace. 



INDEX. 



American Bepnblio, possibilities Exchange, international, gov- 
of, 328. erned by oomparative cost of 

production, 147. 

Balance of trade, 112. Export duties, objections to, 116. 

origin of the idea, 123. Exports, due to other things 

Bounties, 82, 89, 97, 100. than exchange, 117. 

Briggs, Thomas, 324. 

Bright, John, 277. "Fair traders," 149. 

Buckle, 327. Fortification of our coasts, 328. 

Fourier, Charles, 64. 

Capital, not the oppressor of Free trade, a general interest, 12 
labor, 275 ; no conflict between not a British invention, 13 



capital and labor, 306; con- 
fusions in regard to, 306. 

Carey, H. C, 9, 79. 

Coal and iron monopolies, 178, 
309. 

Cobden, Richard, 274, 324. 

Cobden Club, opposed to true 
free trade, 14. 

Competition, ftmctions and ef- 
fects, 306. 

Concentration, causes of ten- 
dency to, 165. 

Cooperative stores, 67. 

Copyright, international, 205. 



natural trade, 14; British, 14 _ 
in the United States^ 15 ; in Ire^ 
land, 17 ; in the Umted States, 
causes which have prejudiced 
working-men against, 18, 224, 
230 ; and socialism, 300 ; inade- 
quacy of the usual argument for, 
224, 230: movement in Eng- 
land, 233, 291, 324; true, 277; 
why its advocacy has been so 
halting, 291 ; means peace, 328. 

Greeley, Horace, 56, 63, 93, 94, 

109, 147, 176, 177, 206. 
Oronlund, Laurence, 303. 



De Tocqueville, 189. 

Distribution, effects of increased Hoyt, Heniy M., 242. 



production on, 256. 

Drawbacks, 84. 

Duties, export and import, com- 
pared, 115. 



Hyndman, H. M., 303. 

Import duties, fall on consumers, 
71; claim that they are paid 



by forei^ers, 85. 

English estates in America, 119, Imports, in a profitable trade 

275. should exceed exports, 116 ; do 

Evarts, William M., 131. not always imply exports, 117. 

333 



334 



INDEX. 



Individualism, 303. 

Interest, rate of, as reason for 

protection, 144. 
Invention, effects of labor-saving, 

263. 
Ireland, tariffs and industry of, 17 ; 

American remittances to, 118. 
Iron, effect of tlie duty on, 150, 

177. 

Labor, efficiency varies with 
wages, 138 ; value the measure 
of embodied, 109, 137 ; relative 
not absolute cost of, determines 
exchanges, 147 ; the true stan- 
dard of value^ 198; not pro- 
tected by tariffs, 204; condi- 
tions becoming harder, 230, 
258; of itself helpless, 247; 
cause of its impoverishment, 
267. 

Laborer, full meaning of the 
term, 68. 

Land, value of, increases as wages 
fall, 142; effects of private 
ownership of, 165, 172, 267; 
the passive factor in produc- 
tion, 173; monopoly of timber 
and mineral lands, 171; influ- 
ence of price of, on wages, 213 ; 
monopoly of, gives control of 
labor, 259, 276; value of, 272; 
how equal rights to, may be 
asserted, 278; necessity of se- 
cure possession, 279. 

Landowner, not a producer, 173. 

Machinerv, effects of, 253. 

Malthus, 9. 

Manufactures, natural develop- 
ment of, 153; localization of, 
158; large demand necessary 
to, 160. 

Marx, Karl, 303. 

Middlemen, 64. 

Mill, John Stuart, 9, 86. 

Mining royalties, 177. 

Money, confusions arising from 
use of, 123 ; fluctuations in the 
value of, 198. 

Navigation Laws, effects of, 193. 



Octroi, 64. 
Over-production, 232. 

Physiocrats, 14, 289, 291. 

Political economy, simplicity of, 
8; method of, 25; mercantile 
system of, 128. 

Production, what it embraces, 
60 ; cost of, not determined by 
wages, 137; advantages for, 
14; factors of, 172; increase 
of, does not benefit all, 232. 

Propertv in land, 165, 173, 267, 
326; how instituted in Great 
Britain, 293. 

Protection, reasserting itself in 
Great Britain, 3, 103, 149 ; ends 
praiseworthy, 5; general ac- 
ceptance, 11; influences it en- 
lists, 12 ; not American, 13, 42 ; 
in the case of Ireland, 17; 
causes that dispose working- 
men in its favor, 19, 242; its 
spirit that of enmity, 13, 32, 
327 ; its corrupting tendencies, 
34, 76, 91; what it prevents, 
45; a world suited to, 52; its 
genesis, 69, 75, 128; is boy- 
cotting of ourselves, 105, 150; 
its real beneficiaries, 166; ef- 
fect on prices, 87; effect on 
profits, 87, 166; effect upon 
other countries, 150; effect on 
land values, 174; first asked 
for the establishment of new 
industries, 94; difference be- 
tween protectionist writers and 
popular pleas, 98; derives 
strength from confusions of 
thought arising from the use 
of money, 128; effects on 
American industry, 181; in- 
jurious to the development of 
manufacttires, 153, 166, 181; 
tends to unjust distribution, 
238 ; home-market argument, 
103; balance -of -trade argu- 
ment, 112; high-wages argu- 
ment, 135; arguments drawn 
from advantages or disadvan- 
tages, 144; abolition of, would 
stimulate industry, 180, 217; 



INDEX. 



S35 



plea for gradual abolition, 217; 
effect on wages, 230 ; cannot be 
abolished in the United States 
on the same lines as in Great 
Britain, 233; and wages, 195; 
cannot protect labor, 202 ; real 
strength of, 242 ; how it makes 
work, 243; cannot check con- 
centrating tendencies, 265 ; 
strengthened by opponents, 
252 ; its relation to monopoly 
of land, 320. 

Protective theory, if true, then 
universally true, 28; opposed 
to natural perceptions and im- 
pulses, 36, 59; arbitrary and 
shifting character of the pro- 
tective unit, 37 ; inconsistencies 
of, 37, 92; applies to smaller 
even more than to larger di- 
visions, 40; cannot be put in 
practice, 90. 

Public debts, 220. 



Quesnay, 14, 291. 



going further, 9, 224; paradox 
to which it leads, 253. 

Tariffs, origin of, 69 ; first Amer- 
ican, 15; are restrictions, not 
on foreigners, but on the peo- 
ple that impose them, 45, 150 ; 
for revenue, 69 ; for protection, 
80; frequent modifications of, 
170 ; Act of 1883, typical blun- 
der in, 91. 

Taxation, indirect, a farming of 
revenue, 76. 

Taxes, direct and indirect, con- 
sidered, 70 ; on ostentation, 287 ; 
on land values, 287; Federal, 
323. 

Thompson, Prof. R. E., 37, 56, 
63, 79, 98, 131, 190, 243. 

Tobacco and cigars, taxes on, 70. 

Trade, nature and function of, 
45 ; a mode of production, 197. 

TKides-unions, influence on com- 
petition, 201, 209 ; can do little, 
302. 



Revenue, Federal, 

sources of, 322. 
Rogers, Prof. Thorold, 239. 

Sailors, character of, 189. 

Savages, their rude methods due 
to isolation, 161. 

Scully, William, American es- 
tates of, 119. 

Shipping, American, 186. 

Slavery, two forms of, 270; in- 
fluence of American, on public 
opinion, 295. 

Smith, Adam, 8, 14, 89, 106, 291. 

Smith, E. P., 79. 

Socialism, relations of free trade 
to, 300. 

Spencer, Herbert, 281. 

Sunmer, Prof. W. G., 250. 

Tariff question, its importance, 
3 ; not safely to be left to spe- 
cialists, 6; not recondite, 7; not 
yet thoroughly discussed, 7; 
cannot be understood without 



Value, the measure of embodied 
possible labor, 109, 137. 



Wages, a high standard of, a 
proper concernment of the 
state, 5 ; assumption that they 
are higher in the United States 
because of tariff, 23 ; not the de- 
termining factor in cost of pro- 
duction, 137 ; rate of, as related 
to land values, 142, 209 ; effect of 
protection on, 195 ; tendency to 
a common level, 199 ; governed 
by competition in labor-mar- 
ket, not in goods-market, 199 ; 
do not increase with employers' 
profits, 207; in widest occupa- 
tions, determine general rate 
of, 211; effects of abolition of 

W protection on, 230. 
ealth, increase of, does not 
benefit all classes, 23L 
Wells, D. A., 168, 
Work, treated by protectionists 
as an end, 243 ; now this feeling 
arises, 247. 



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